EUR and GBP have seen a strong sell off against Canadian Dollar in the last few weeks and in this article we will take a look at the swing sequences in EURCAD and GBPCAD to present the path of least resistance and also look at the future targets.
EURCAD Cycle from 3.2018 Peak is Incomplete
Chart below shows the cycle from 3.2018 peak is still in progress and with the break below 10.2018 low, 1.43518 – 1.34877 is the next logical target. As far as bounces fail below the peak at point “6”, the target area shown with blue box remains valid. Furthermore, there is a bearish sequence down from 1.2019 peak which also calls for more downside. Structure of the decline from 1.2019 peak could either be a Zigzag Elliott Wave structure or a corrective double three Elliott Wave structure. In either case, the target remains valid as far as bounces remain below 3.6.2019 (1.5228) peak. In case the decline from 1.2019 peak is unfolding as a Zigzag Elliott wave structure, bounces will be shallow and in case it’s unfolding as a double three Elliott wave structure, we could soon see a bigger bounce to correct the decline from 3.6.2019 (1.5228) peak before pair turns lower again. In either case, bounces should find sellers in 3, 7 or 11 swings until 1.43518 – 1.34877 area is not reached. Once this area has been reached, then we expect to see the buyers appearing to produce a larger 3 waves bounce which should correct at least the cycle from 1.2019 peak.
GBP – Canadian Dollar Cycle From 3.2018 Peak is Incomplete
GBPCAD cycle from 3.2018 peak is also incomplete because it has not yet reached the ideal target at 1.59801 – 1.55502. Structure of the decline from 3.2018 peak is likely to become a zigzag because so far pair has not shown any reaction from 0.618 – 0.764 Fibonacci extension area of the decline from 3.2018 high to 8.2018 low which supports the view that it would get to 1.59801 – 1.55502 area without a major bounce in the middle but even if we do get a bigger bounce and structure of the decline from 3.2018 peak becomes 7 swings, pair should still find sellers in the bounce in 3, 7 or 11 swings until it doesn’t reach 1.59801 – 1.55502.
Looking at these two charts, it becomes evident that EUR and GBP should remain weak against CAD until EURCAD doesn’t reach 1.43518 – 1.34877 and GBPUSD doesn’t reach 1.59801 – 1.55502 area.