close icon

Decoding EURCAD’s Strange Behavior

“Wave (5) could extend the pair’s weakness a little more, but eventually EURCAD should start rising in wave II/B, which could lead the rate up to at least 1.47.” This is the final sentence of a forecast, called “EURCAD to Find Support Soon”, which we published on August 31st, 2014. Since then, the exchange rate has been making higher highs and lower lows in the zone between 1.3880 and 1.4640. A strange behavior, which is a real nightmare, especially to breakout traders. The chart below shows how our forecast of EURCAD looked like more than four months ago.
eurcad rate 31.8.14.
As visible, the pair has been in a strong downtrend since the March top of 1.5583. What gave us the reason to expect a recovery, was the wave structure of the decline. It was a five-wave impulse. According to the Elliott Wave Principle, every impulse is followed by a correction in the opposite direction. On December 16th EURCAD reached 1.4641, which is satisfactorily, according to the forecast. However, there is no way we could have predicted that the correction we were expecting was going to be an expanding triangle. On the chart below you can see how EURCAD has been developing.
eurcad 8.1.15
Wave (5) did extend the pair’s weakness to 1.4033. Soon after that the corrective wave B triangle started. Just like the common contracting triangle, the expanding one precedes the final movement of the larger sequence. In this case the larger sequence seems to be an A-B-C zig-zag. Wave C, which is currently under construction, does not look finished yet, but is probably in its final stages. This means, that if this is the correct count, the bears should not get over-confident about EURCAD, because a reversal to the upside could occur soon.

Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

USDCAD Rises in Predictable Elliott Wave Manner

USDCAD rose significantly this past week, climbing from 1.2512 at the open to as high as 1.2949 Friday. The surge can be attributed to the slide in crude oil prices. Oil and USDCAD are known to have an inverse correlation due to the heavy reliance of the Canada’s economy on the commodity. And while the…

Read More »

Two Months Ahead of the 400-Pip Slide in EURUSD

Economic and fiscal steps taken to help the global economy rebound from the COVID-19 crisis are still in effect in both U.S. and EU. The amount of stimulus by the Fed far eclipsed the measures taken by the ECB. Direct unemployment payments are even creating a labor shortage. Many people prefer to rely on government…

Read More »

Elliott Wave Support Can Send USDZAR 15% Higher

It’s been a bad year for USDZAR bulls. The pair has been declining ever since it reached a high of 19.34 in early-April 2020. As of this writing, it is barely holding above 14.30, down 26% in a little over twelve months. Does this mean now is a good time to join the bears? We…

Read More »

Ahead of EURUSD ‘s Disappointing Start to 2021

Overall, 2020 was a good year for EURUSD bulls. Despite the March crash during the coronavirus-related volatility, the pair ended the year up almost 9%. With more stimulus already in the pipeline at the start of 2021, it made sense to expect further devaluation of the dollar against the Euro. Alas, common sense doesn’t always…

Read More »

USDJPY Gains 450 Pips and Counting in Two Months

2020 wasn’t a good year for USDJPY bulls. Starting from 108.63 in January, the pair closed at 103.32 on December 31st, down 4.9% in twelve months. But what the dollar lost against the yen in the entire 2020 it is now close to recouping in less than three months. USDJPY is approaching 108.50 as of…

Read More »

USDTRY Drop Accelerates as Elliott Wave Predicted

The Turkish Lira hit its highest level against the U.S. dollar in six months. The country economic and legal reforms announced last year coupled with tighter monetary policy appear to be giving the desired effect. USDTRY is down 19.3% from its November 2020 high after being in an uptrend since mid-2008. Most analyst, however, are…

Read More »

EURUSD Surges 570 Pips After Fibonacci Encounter

EURUSD is trading at levels last seen in April 2018, when it was on its way down to 1.0636 by March 2020. The pair is now approaching 1.2200, up 14.5% since the COVID-19 selloff nine months ago. But trends don’t move in a straight line. Two months ago, we showed you how Elliott Wave analysis…

Read More »

More analyses