USDCAD looks quite strong after a rally of more than 170 pips. Could this strength be deceptive? Traders may be willing to find out.
Impulses show the direction of the trend. Every impulse is followed by a correction. In order to explain why do we expect USD CAD to regain negative bias, we have to show you a chart, where you can see an impulse and a correction. Let’s see if the one below will do the job.
The chart depicts a nice five-wave decline from 1.1098 to 1.0925, followed by what is called an expanding flat by those, who use the Elliott Wave Principle as a forecasting method. So, the 5-3 Elliott Wave cycle looks finished and, if this is the correct count, we should expect the USD CAD foreign exchange pair to fall below the bottom of 1.0885. This bearish scenario would be invalidated, if prices decide to revisit 1.1100.
