According to the Elliott Wave Principle, trends move in waves – five waves in the direction of the larger trend, followed by three waves against it. This is the 5-3 Elliott Wave cycle. So, if you suspect that the price chart of a particular financial instrument shows an almost finished five-wave impulse, you better prepare for the corresponding correction. That is what we are going to do with the EURCAD currency pair.
The 4-hour chart of the EURCAD exchange rate shows at least three degrees of trend inside one another. The whole decline from 1.5585 to the current lows near 1.4250 can be labeled in impulsive fashion. 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.
