close icon

EURCAD and the Power of Elliott Wave

EURCAD was trading at 1.5785 on February 11th, when we published “EURCAD at the Edge of the Abyss?”. We were expecting a sell-off, which “should be powerful enough to take the exchange rate below 1.5100.” In other words, we were anticipating a decline of nearly 700 pips. As always, the reason for this negative outlook was the Elliott Wave Principle and what it allowed us to see on the hourly chart of EURCAD. It is given below.
eurcad 11.2.16
The theory says that after every impulse-correction cycle, the trend resumes in the direction of the five-wave sequence. In this case, we recognized an impulsive decline, followed by an expanding flat correction. So, as long as the invalidation level at 1.6105 was safe, targets below 1.5100 remained valid. The next chart demonstrates how EURCAD has been developing since that forecast.
eurcad 23.2.16
Wave 5 of C of (2/B) continued to the north for a while and climbed to 1.5913. But this did not change the count in any way, because the invalidation level was much higher. Eventually, the bulls ran out of steam, which led to a sharp bearish reversal, just as the Wave Principle suggested. Only 11 days after the forecast, on February 22nd, EURCAD fell as low as 1.5058, thus exceeding the target at 1.5100.
From now, as long as the rate continues to make lower lows and lower highs, the downtrend is still in progress. Nevertheless, keep in mind the scenario shown above. It implies the idea of an (A)-(B)-(C) zig-zag correction from 1.6105 to 1.5058, where wave (C) is an expanding ending diagonal. In order for this count to become the primary one, the declining line, connecting the tops of waves 2 and 4 of (C) has to be broken. Until then, staying with the downtrend is the smarter decision.

What other markets are you interested in? Prepare yourself for whatever is coming. Order your on demand Elliott Wave analysis now or pre-order one of our 8 Premium Forecasts due out every Monday. Stay ahead of the news in any market with the Elliott Wave principle.



Stay informed with our newsletter

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

Privacy policy
You may also like:

GBPJPY Recovery Takes Shape of an Impulse Pattern

Less than two years ago, during the coronavirus market panic, GBPJPY fell to a multi-year low of 124.04. The last time the pair traded at such levels was in August, 2012, when the world was still recovering from the Financial Crisis. The Covid-19 selloff didn’t last that long though. After plunging 10.9% in March 2020…

Read More »

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 »

More analyses