USDCAD reached 1.3187 in May, but then fell to as low as 1.2654 by June 8th. However, the pair recently took out the top at 1.3187 and managed to climb to 1.3251. Our purpose is not to explain why did this happen, but to demonstrate that with the proper forecasting method and the ability to apply it correctly, traders could accurately predict these price swings, and not only in the FOREX market.
It was May 30th, 2016, when we sent our premium clients the following chart of USDCAD. It shows what the Elliott Wave Principle was suggesting about the rate’s future developments two months ago.(some of the marks have been removed for this article)
As visible, by applying the Wave principle to the 4-hour chart of USDCAD, we came to the conclusion we should expect a decline to around 1.2700 first, followed by another recovery, which was supposed to exceed the previous high at 1.3187, marked with (y). This chart was all we needed to form our opinion. We did not pay any attention to GDP, inflation, interest rate decisions or any other type of economic data. As the next chart proves, this approach paid off quite well.
Instead of waiting for each piece of news, which was going to be released, we choose to rely on what the market itself was telling us. All the clues we needed were on the charts two months ago, we just had to read them correctly, which is where the Elliott Wave principle comes to the stage and allows to do that. So, if you are waiting for news, events or speeches to tell you where prices and rates are headed, chances are the market already told you long time ago. Did you listen?
What to expect from now on? What is the bigger picture saying? Is USDCAD going to continue even higher or the resistance near 1.3250 would turn out to be too strong for the bulls to breach? Prepare yourself for whatever is coming. Order your Elliott Wave analysis due out every Monday at our Premium Forecasts section. Stay ahead of the news in any market with the Elliott Wave principle.