Since 1973, there have been 4 instances when the USDCAD has declined for 9 consecutive weeks; one of these instances is now. In the previous 3 instances, the pair has registered multi-month lows. Additional evidence calls for a low of significant proportion. The Elliott wave pattern identifies low risk entry points and targets.
The red dots indicate when the USDCAD had declined for 9 consecutive weeks. This phenomenon has occurred on 4 separate instances going back to 1973 (one instance was twice a row….10 weeks down) and each time at least a short term low is put in place. The green line is the difference between speculative and commercial positioning. USDCAD bottoms occur when this indicator is at its peaks (when specs are very long and commercials very short CAD). The indicator is at its highest level ever now.
From an EW perspective, we can count the decline from 1.0866 as the top of a 2nd wave (or B wave). Wave 3 (or C) has been underway since 1.0866. In percentage terms, the decline from 1.0866 would equal 1.618 X (the decline from 1.1875-1.0340). This is a common relationship that is found between the lengths of waves 1 and 3. Either a 4th wave is underway or a more bullish pattern is unfolding from .9055. Either way, this rally should reach the previous congestion area near .9700. The 38.2% of 1.0866-.9055 is at .9750 as well.
The 15 minute chart shows the constructive pattern. The initial rally from .9055 to .9404 was either wave A or 1 in a 3 wave corrective series or 5 wave impulse. The clear 3 wave decline that followed was either wave 2 or B. Wave C or 3 is now underway towards the .9700 level. Objectives are the 100% extension of .9055-.9404/.9236 at .9584 and the 161.8% at .9799. Even shorter term, wave 1 of C (or 3) is already complete and a small setback should end near .9360/70 (maybe lower but price needs to remain above .9251 in order to keep the bullish bias intact) before the next bull leg.