The week did not start well for USDCAD, which declined to 1.3139 on Monday, October 10th, but the bulls managed to regroup and pushed the pair back up to 1.3306 so far. It looks like the rate is going to reach a new multi-month high soon. However, it is a little hard to profit from past price movements. In order to take advantage of the price action, traders have to be able to anticipate it. That is what the Elliott Wave Principle allows us to do. Before the markets opened on Monday, October 3rd, we sent our premium clients the following chart of USDCAD.
As visible, ten days ago, while the pair was trading around 1.3115, we were expecting a recovery to new swing highs. Truth is, this count was an alternative one at first, because we thought USDCAD was likely to move sideways within a triangle pattern in wave (b) for a while. But the bulls proved to be stronger than expected and did not even allow a consolidation to develop. Instead, they exceeded 1.3280, thus confirming the above-shown count, where wave (b) is over at 1.3000 and wave (c) is an ending diagonal. Below you can see an updated 4-hour chart of USDCAD.
Wave 3 of (c) terminated at 1.3312. Then the pair took a step back in wave 4, before the uptrend resumed in wave 5, which still seems to be in progress. As visible, USDCAD’s behavior could be predicted. You can even think it has been programmed to move this way by some superior intellect with Elliott Wave affinity. Relax, it was not. It is just following the Wave principle’s rules and guidelines, which derive from people’s own emotions. It turns out, Elliott Wave analysis allows you to catch a glimpse of the crowd’s collective brain. And it is a massive advantage.
What to expect from now on? What is the bigger picture saying? Is USDCAD going to continue even higher or the resistance near 1.3310 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.