• 12 hours Conspiracy Theories Set Tone For 5G Cold War
  • 13 hours Working From Home Will Transform The Energy Industry
  • 14 hours The Multi-Billion Dollar Race For A Vaccine
  • 15 hours Can Domestic Tourism Bolster Emerging Economies?
  • 16 hours Australia Considers $100 Million Investment To Kickstart Mining Industry
  • 17 hours Has Re-Opening The Economy Been Successful?
  • 18 hours Gold Miners Still Have Massive Upside Potential
  • 19 hours The Risky World Of Oil Hedging
  • 20 hours Africa Turns To Innovation Amid The Global Pandemic
  • 21 hours COVID-19 Sparked A Bicycle Boom
  • 22 hours Will Government COVID Intervention Cause Inflation?
  • 2 days The Bitcoin Miner That Is Paid To Do Nothing
  • 2 days Capital Gain vs. Capital Consumption
  • 2 days Tesla’s Latest Battery Innovation Ready For Use In China
  • 3 days China Targets Hong Kong As Cold War With US Heats Up
  • 4 days No Shirt, No Shoes, No Mask, No Service
  • 5 days Is Bitcoin Actually Worth The Energy It Uses?
  • 5 days Insurance Companies Are Turning People Away As COVID-19 Crisis Escalates
  • 5 days Mining Exploration To Drop By Nearly 30% Despite Gold Boom
  • 5 days Europe Set To Unveil Its $500 Billion 'Green Deal'
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

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