EURCAD: Anticipating triangle formation and bullish breakoutHello traders,
Here is my detailed long-term Market analysis of EURCAD. This is intended to educate those who might be new or at their intermediate level in Elliott wave theory.
The EURCAD currency pair is currently exhibiting a sideways trend, which is characterized by relatively stable price movement within a confined range. This type of market behavior often precedes significant price movements once the consolidation phase ends.
Analysis Highlights
1. Sideways Range and Potential Triangle Pattern
Sideways Range : The EURCAD pair has been trading within a horizontal range, indicating a period of consolidation where neither bulls nor bears have a definitive upper hand.
Triangle Pattern Formation : This range is likely forming a triangle pattern. In Elliott Wave Theory, a triangle is a corrective wave pattern typically observed in wave (B) of a zigzag correction or wave 4 in an impulse wave sequence.
Wave (B) of Zigzag : The ongoing formation suggests that the triangle could be wave (B) of a larger zigzag pattern, which generally consists of three waves: A, B, and C. The zigzag pattern typically appears in a corrective phase.
2. Anticipated Impulsive Upward Move
Completion of the Triangle : Once the triangle pattern completes, it is expected to be followed by an impulsive wave (C). This is typically a strong, directional move which would be upward in this case.
Confirmation : For the bullish outlook to be validated, the completion of the triangle pattern in all its constituent waves (labeled A, B, C, D, and E) is crucial.
3. Key Points for a Bullish Outlook
Triangle Completion : Wait for the triangle pattern to fully form, completing all its waves.
Breakout Confirmation : Look for a breakout above the triangle's upper boundary and a key resistance level.
4. Target and invalidation levels
1.62284 Level: The minimum target for the anticipated upward wave.
Invalidation level: When price move below wave C of the triangle.
I hope this helps.
Cheers and happy trading!
