Elliott wave analysis on USD/CAD - Long term count.

Long term Elliott Wave Count for USD/CAD:

 

MONTHLY

Weekly

 

 

I think we should start with the long term Picture and Count.

 

Looking at the monthly chart the rally since the 0.9562 low in early 1974 to the 1.6187 top in early 2002 was a large Zig-Zag (A-B-C) correction. 

 

Wave A went from 0.9562 to 1.4450.

 

Wave B corrected a Little more than 61.8% of wave A and went from 1.4450 down to 1.1190

 

Wave C was almost perfectly equal to the length of wave A and went from 1.1190 up to 1.6187.

 

Once this 28 years zig-zag correction was in place we saw a brutal impulsive decline erasing more than the 28 year rally in just 5 years.

 

However, trying to fit all of the decline from the 2002 high at 1.6187 Down to the 2007 low at 0.9056 into an impulsive decline is impossible.

 

If however, we Count the decline from 1.6187 down to 1.1740 as the impulsive decline and all the rest as a correction, we get some very nice Fibonacci relationships.

 

If we start with the impulsive decline from 1.6187 to 1.1740 we will find the following Fibonacci relationships:

 

Wave 3 is 3 times longer than wave 1

 

Wave 5 is 0.618 times the distance traveled from the top of wave 1 at 1.6187 down to bottom of wave 3 at 1.2644

 

If we then look at the expanded flat correction that followed we find the following Fibonacci relationships:

 

Wave b was 3 times the length of wave a from 1.1875 and down to 0.9056 and clearly in three waves. If we look at those three waves wave c was 1.618 times longer than wave a and wave b corrected 50% of wave a.

 

Wave c of the expanded flat correction became 4.236 times longer than wave a and is clearly in five waves.

 

If we now move down to the Weekly chart, which shows the five wave c rally from 0.9056 to the high of 1.3063. The following decline from 1.3063 to 0.9406 is also in three waves making it a correction. Wave c is equal in length to wave a. Therefore it's most likely and X-wave. That Means we should be looking for an other corrective rally from the 0.9406 low.

 

Even though it's most likely to be a correction we could be looking at a very powerful one. As can be seen, we have broken above the medium term resistance-line and add to that, we have seen a break above the rising channel resistance-line, which is very bullish if confirmed and could sent us all the way up to the 1.16 area if this rally really takes off.

 

However, there are some hurdles along the way. One hurdle is at 1.0658 and at 1.0853, but if the later breaks then we should see 1.1600 tested.