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.
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.
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