USD CAD managed to climb above 1.13 in the beginning of the week, but the bulls quickly ran out of power, which brought the forex pair back down to the 1.1220s. In order to form an opinion about the most probable future development, we will examine the 15-minute chart of USDCAD.
Does the chart show a pattern we recognize? Yes it does. A five-wave impulsive rally, followed by a three-wave correction. According to the Elliott Wave Principle, we should now expect USD CAD to move in the direction of the five-wave sequence. Pay attention to the zone, where the retracement seems to have ended – the 61.8% Fibonacci level. Second waves often terminate in this Fibonacci area. If this is the correct count, USD CAD should exceed the top of 1.1316. This scenario would be invalidated, if price falls below the start of the five-wave sequence at 1.1190.
