USDCAD bearish trend is still intact despite yesterday’s strong intraday rally. A bearish move to 1.19 is still very likely unless a break above 1.24 happens. There are two scenarios and how to swim amidst them explained below based on 19 September USDCAD Elliott wave analysis and forecast.
It’s no secret to you that I favor the bearish move continuation. I still do until price breaks above 1.24. In the 12th September update, we used the chart below.
My attention shifted to the 4th wave. I expected the 4th sub-wave (in blue) of wave 5 to rally toward the 1.2256-1.2290 reversal zone before price started dropping to 1.19 if this count is correct. In a later update, I posted an analysis that looked closely at the 4th sub-wave with the chart below.
The reversal zone was well posted at 1.2256 and 1.2290. But I quoted as thus on 14th September update:
If price gets to this zone and breaks below the trendline as shown above, there is high likelihood for price to return downside. If price is short of reaching this zone before breaking below the trendline, it is important to wait for a break below 1.2130 for a good entry price. Targets are 1.2, 1.19 and 1.18.
A break above 1.2256-2290 region could be an indication that the bullish correction has resumed or a new wave analysis is required.
Price hasn’t satisfied any of the requirements. There wasn’t a significant break below 1.2130. before a rally above the reversal zone marginally. If price continues upside and significantly break above this level, we have an alternative scenario (in green) below. Otherwise we stay with the bearish trend to 1.19 for as long as it lasts.
A significant break below 1.2240 could set the bearish trend back on track. Otherwise, a break above 1.24 would mean that the bearish trend has ended and price is making a bullish correction. If this happens, our next bet will be to trade the 5th wave of the bullish move at the end of the 4th wave.
What are your thoughts that you would like to share with me. Please drop in the comment box below.