EW ANALYSIS: EURCAD Can See A Bigger Corrective Recovery
Updated
Hello traders!
Today we will talk about an interesting pattern on EURCAD.
Looking at the daily chart, we have seen sharp and impulsive decline in 2018, which looks like a leading diagonal in wave 1, so it's the first leg away from top that can be a signal of a bearish reversal! The most important thing for us is that we have seen only a three-wave a-b-c corrective rally in wave 2 at the end of 2018, from where we have seen another sharp and impulsive decline, right from the right shoulder of the potential Head&Shoulders pattern that can be clearly seen in the 4-hour chart and it can be indicating a bearish continuation. For now, that neckline of H&S pattern acting as a strong support, but once we see a break out below that neckline, then this would be a confirmation for a bearish continuation!
So, looking at the 4-hour chart, after that five-wave drop we have to remain bearish, but before a bearish continuation, we may see another three-wave (a)-(b)-(c) corrective recovery of a lower degree, where wave (b) seems to be a bullish triangle pattern. That being said, watch out for another rally for wave (c) once a triangle in wave (b) fully unfolds, ideally into 50%-61,8% Fibonacci retracement and 1.5300 resistance area, where bears may show up again!
Of course, there can be even something more complex, but as long as it's trading beneath 1.5640 invalidation level, we will remain bearish!
Trade well!
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
Today we will talk about an interesting pattern on EURCAD.
Looking at the daily chart, we have seen sharp and impulsive decline in 2018, which looks like a leading diagonal in wave 1, so it's the first leg away from top that can be a signal of a bearish reversal! The most important thing for us is that we have seen only a three-wave a-b-c corrective rally in wave 2 at the end of 2018, from where we have seen another sharp and impulsive decline, right from the right shoulder of the potential Head&Shoulders pattern that can be clearly seen in the 4-hour chart and it can be indicating a bearish continuation. For now, that neckline of H&S pattern acting as a strong support, but once we see a break out below that neckline, then this would be a confirmation for a bearish continuation!
So, looking at the 4-hour chart, after that five-wave drop we have to remain bearish, but before a bearish continuation, we may see another three-wave (a)-(b)-(c) corrective recovery of a lower degree, where wave (b) seems to be a bullish triangle pattern. That being said, watch out for another rally for wave (c) once a triangle in wave (b) fully unfolds, ideally into 50%-61,8% Fibonacci retracement and 1.5300 resistance area, where bears may show up again!
Of course, there can be even something more complex, but as long as it's trading beneath 1.5640 invalidation level, we will remain bearish!
Trade well!
Disclosure: Please be informed that information we provide is NOT a trading recommendation or investment advice. All of our work is for educational purposes only.
Note
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EURCAD ?! It's finally breaking out of a triangle towards 1.5300 resistance area! #EURCAD #Elliottwave
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