• 2 days Ireland Balks At Biden’s Global Tax Plan
  • 5 days Robinhood To Trade On Nasdaq Targeting $32B Valuation
  • 9 days Facial Recognition Is Watching You
  • 10 days Biden’s $3.5T ‘Human Infrastructure’ Workaround
  • 10 days The Fed’s $3 Trillion Headache
  • 13 days Why Bitcoin Could Struggle To Recover After Epic Crash
  • 13 days Wells Fargo Back In The Spotlight Over Personal Loan Cancellations
  • 14 days Delta Variant Real Threat To Economic Recovery
  • 17 days JEDI Drama Continues With Microsoft Contract Cut
  • 19 days DiDi Shares Take a Beating From Chinese Regulators
  • 20 days Thousands Of Companies Hit In Latest Ransomware Attack
  • 20 days Jobs Report Has Big Numbers, But Still Big Problems
  • 21 days Robinhood’s ‘Mission’ Questioned in $70M Fine
  • 24 days Didi Just Went Public, And Uber Is Loving It
  • 25 days Islamic Finance On Track To Hit $3.7 Trillion
  • 26 days The Lumber Bubble Is Bursting
  • 30 days A New Entry In The Two Trillion Dollar Club
  • 30 days 3 Upcoming IPOs To Watch As IPO Market Rebounds
  • 32 days Welcome To The Used Car Bonanza
  • 33 days The Year Of The Retail Investor Keeps Getting Bigger
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Gregor Horvat

Gregor Horvat

Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for…

Contact Author

  1. Home
  2. Markets
  3. Other

Elliott Wave Analysis: Ending Diagonal On USDCAD Indicates A Possible Reversal Lower In The Near-term

USDCAD has made a five wave of a decline from 1.4683 high which is a very strong evidence for a bearish trend. We are talking about black wave A/I, the first wave of this big new bearish cycle, followed by current slow and overlapping price movement that is either wave B or II. So we know that sooner or later downtrend will resume, but the question is from where. Well, based on recent price developments we see pair headed higher, into final blue leg C, after a triangle correction in blue wave B-circled had been recognized. Ideally this whole corrective rally since April will find a top and a turning point around the 1.3500-1.3880 area.

USDCAD, Daily

USD/CAD Daily Chart

Regarding the 4h chart, we can see that USDCAD has been trading higher for the last few weeks, especially since crude oil has turned south. On Loonie we see higher highs and higher swing lows but with overlapping price action between two converging trendlines so pair can be making an ending diagonal as shown on the 4h chart. That's a strong reversal pattern which could send price south this month, maybe already from around current levels as we see the ending diagonal in final stages, with red wave 5) midway through its completion.

Based on latest update, invalidation level is above 1.3700, as wave 3) must not be the shortest wave.

Divergence also indicates a possible reversal lower.

USDCAD, 4H

USD/CAD 4-Hour Chart

The ending diagonal is a special type of motive wave that occurs primarily in the wave 5 position when price has moved too far and too fast. Some ending diagonal triangles appear in the C wave of an ABC correction. In all cases, the ending diagonal terminates the move of larger patterns. They consist out of five waves, with each having three more sub-waves.

Basic Ending Diagonal:

Idealized Elliott Wave Basic Ending Diagonal

 


Interested in our services? Then visit our homepage at www.ew-forecast.com and take a glace at some of our charts. You can even subscribe to our Twitter account -> @ewforecast

 

Back to homepage

Leave a comment

Leave a comment