Elliott Wave Analysis: GBPUSD and USDCAD Both Breaking Lower
Cable fell sharply to the downside last week which has been technically expected after we identified a bounce up into a corrective wave 2 with limited upside near 1.2960-1.3000. A decline was very strong from there, so it may be only a start of wave 3 that can be headed to much lower levels, possibly even to 1.2450 for wave three of three. On the other-hand rise back above 1.2900 will likely suggest that decline from May highs was just a temporary correction and that stronger prices can follow.
USDCAD made a sharp and strong fall overnight, which we now see it as blue wave three of 5. Ideally this fall is part of a final wave, which means after wave five finds a bottom a new minimum three wave contra-trend reaction will follow. At the moment we still see room for more weakness within wave five, ideally towards the Fibonacci ratio of 200. The later recovery can approach the 1.3420 region and the lower trend line, where potential resistance can be seen.
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