In our previous analysis of EURCAD, we suggested the pair has to complete a three-wave corrective recovery, before the time for another large leg to the south arrives. It took a while, but now we could see what type of correction EURCAD has chosen. It is given on the chart below.
We could easily count a five-wave impulsive decline from 1.6105 to 1.5245. The rest of the price action appears to be an A-B-C expanding flat correction. According to the Elliott Wave Principle, the 5-3 wave cycle points lower. If this is the correct count, we should prepare for a large decline in EURCAD, as long as the invalidation level at 1.6105 holds. The anticipated sell-off in wave (3/C) should be powerful enough to take the exchange rate below 1.5100.
