A five-wave impulse followed by a three-wave correction is what every Elliottician is looking for. It seems that we have found one such pattern on the hourly chart of EURCAD.
According to the Elliott Wave Principle, the prices of financial instruments move in “waves” as follows: five waves in the direction of the larger trend and three waves against it. The chart above appears to be showing what we are talking about. You can see the impulsive wave structure of the decline from 1.4266 to 1.3953, as well as the corresponding retracement to the upside, which is still currently in progress. This means, that the 5-3 cycle should soon be completed and the downtrend could resume. If this count is correct, EURCAD should be expected to go south with minimum targets below the bottom of 1.3953. This scenario would be invalidated, if the euro climbs up above 1.4266 against the Canadian dollar.
