9 Year Trendline and Fibonacci Resistance
Short Term Wave Count Confirms Trend
The monthly chart shows that the EURCAD was rejected at a 9year trendline last month. Additionally, the rally from 1.3487 that began in early 2006 reversed at the 61.8% retracement of 1.6976-1.3496. An impulsive decline from the top and a 3 wave flat correction points the near term trend down as well. A break of 1.5307 instills confidence in the bearish outlook.
Current Price: 1.5379
The monthly chart shows that the EURCAD was rejected at a 9year trendline last month. Zoom in on the monthly chart and you will see that last months candle was a shooting star (a bearish reversal candle). The evidence points to a major top at last months high at 1.5688.
The weekly chart also presents evidence that points to a top and reversal. The rally from 1.3487 that began in early 2006 reversed at the 61.8% retracement of 1.6976-1.3496. Last months high at 1.5688 is critical to the bearish case.
The short term wave structure is bearish as well with an impulsive decline from the top and a 3 wave flat correction (this is a rare irregular flat) that make up waves 1 and 2. If this count is correct, then wave 3 down is underway, and measured objectives are at 1.5220 (where 3 = 1) and 1.5041 (where 3 = 161.8% extension of 3). The alternate count is below, which would be eliminated if 1.5307 is taken out.
