Elliott Wave Analysis: USDCAD Short-term Structure Is Pointing Towards 1.0120-1.0150

USDCAD reversed sharply to the downside at the end of the last week, clearly in impulsive fashion, so structure is now pointing for weaker USDCAD if we consider that rally from 1.0243 was made in three legs, called a correction. We are talking about wave B that has a high in place at 1.0442 from where we expect an impulsive extension down in wave C, back to 1.0243 and possibly even to 1.0150 in this week while 1.0442 is not breached. Recently minor correction has stopped at 1.0350-1.0370 resistance zone from where weakness could resume.

On a daily level we can see that prices have turned bearish maybe just temporary but in either case we need minimum three legs down. Why? Because that’s a minimum structure of a correction, called a zig-zag. So even if larger trend is still up and if current bearish waves are small piece within larger uptrend, the contra-trend movement still needs to be made by three sub-waves.