Guest Commentary: Elliott-Inspired Buying Opportunity in USD/CAD
Today, we will take a look at USDCAD price action from the 1.1225 high made on Jan. 31. The drop from 1.1225 to 1.0968 was a corrective decline and has been sub-divided in three larger swings labeled ((a)) – ((b)) and A.
USDCAD attempted to rally but ultimately failed very close to the 50% Fibonacci retracement of the drop from the 1.1225 high. Sellers then jumped back in and pushed price to new lows below 1.0968, marking five downward swings from the 1.1225 peak, which is an incomplete swing sequence at this time.
We believe the sixth swing has either completed at 1.0995, or the pair will spend some more time in the sixth swing, either to complete a triangle pattern or even test the downtrend line and 50% Fibonacci retracement level at 1.1012 before turning lower in the seventh swing.
On the chart, the green highlighted zone between 1.0766 and 1.0828 would be a good area for buyers to come in, looking for prices to rise to new highs above 1.1225 or at least correct the entire decline from the 1.1225 peak.
By Eric Morera of Elliottwave-Forecast.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.