Elliott Wave Analysis: Bigger Corrective Wave Unfolding On USDCAD; Possible Reversal Around 1.3450
USDCAD has been trading quite aggressively lower earlier after a decisive break out of an upward channel connected from May of 2015 lows, which was an important evidence for a change in trend. That said, price of USDCAD is likely going even lower as decline from 1.4680 has unfolded in five waves, labeled as wave A/I; first wave of a minimum big three waves of a decline. However, nothing moves in straight lines so we need to be aware of a corrective bounce up in wave B/II which is now already underway with still some room left towards 1.3500 area since we expect bigger corrective three wave recovery.
USDCAD, Daily
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On the lower time frame, USDCAD has been trading south at the start of the month, but this is now changing after three waves of a decline that found a support a week back near 1.2650. We labeled this as end of wave B-circled that is part of a bigger recovery in black wave B, visible on a daily chart. So far we have seen a very nice rise back above 1.2906 where overlap suggests that blue wave C-circled is underway towards 1.3200 and possible even to 1.3450.
Minor corrective wave 2) could already be underway and the lower corrective channel line may act as a support and a reversal higher.
USDCAD, 4H
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