“Wave C, which is currently under construction, does not look finished yet.” That is what we said on January 9th in “Decoding EURCAD’s Strange Behavior”. In that material we assumed EURCAD is in wave C of an A-B-C zig-zag correction with an expanding triangle for wave B. Now, two and a half months later, we have a better idea of how wave C would look like.
The Elliott Wave Principle states that C-waves could take the shape of a regular impulse or an ending diagonal. It seems EURCAD has chosen the second option. If this is the correct count, wave 5 of C should make one last bottom before the bears run out of power. After that, EURCAD should be looked at from the bullish side. In theory, when the larger trend resumes, corrections are fully retraced. Since the whole decline from 1.5586 is a three-wave correction, the best case scenario suggests we should prepare for rates above 1.56 in the long term.
