EW analysis - USD/CAD to reverse soon for big move down
In the latest weeks the CoT-data showed a build up of a big net-long position of the commercials in the CAD-Futures (6C), which suggests, that CAD may soon see a big move to the upside. That of course means a big short potential on USD/CAD.
So I did a EW analysis on a weekly timeframe and took a closer look at the CoT-data.
In the CoT-indicator I framed a mean channel with red lines. As the commercial (red) indicator is contained with in these lines, the indicator hat not much predictive value. But when it touches the upper boundary or exceeds it, bigger moves in the opposite direction are indicated. Same on the downside. I marked a few examples with green and red arrows.
So my favourite EW interpretation is that USD/CAD is developing a big flat correction since the high in january 2002 and is now in the beginning stages of wave C to the downside. Precisely USD/CAD is currently in wave 5 of wave 2 of this C wave, which should probably end next week at about 1.411 - 1-413.
After that a swift move to the downside should follow and mark the beginning of wave 3 down.
This interpretation is also consistent with seasonal patterns.
On a shorter timeframe we might see something like this. Tough I'm not sure, if wave 4 is not a shortened move and already finished.
So I did a EW analysis on a weekly timeframe and took a closer look at the CoT-data.
In the CoT-indicator I framed a mean channel with red lines. As the commercial (red) indicator is contained with in these lines, the indicator hat not much predictive value. But when it touches the upper boundary or exceeds it, bigger moves in the opposite direction are indicated. Same on the downside. I marked a few examples with green and red arrows.
So my favourite EW interpretation is that USD/CAD is developing a big flat correction since the high in january 2002 and is now in the beginning stages of wave C to the downside. Precisely USD/CAD is currently in wave 5 of wave 2 of this C wave, which should probably end next week at about 1.411 - 1-413.
After that a swift move to the downside should follow and mark the beginning of wave 3 down.
This interpretation is also consistent with seasonal patterns.
On a shorter timeframe we might see something like this. Tough I'm not sure, if wave 4 is not a shortened move and already finished.