CAD Possible Weakening till the Mid of 2009 (USD/CAD)

Introduction

In February's article Several Words about CAD (EWA of USD/CAD) two possible variants of further movement were forecast. Price reversed downwards just in the projected area. Then the price began to fall successively. The result is given in Figure 1.

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For illustrative purposes projections of expected price movement 4-month ago are given in the chart.

Current wave counting

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From my point of view there are two most probable scenarios, which differ in the price upward reversal point and some wave counting details.

According to the main variant such a reversal has already happened, wave B of (4) is completed and the first waves of upward wave C of (4) are forming, whereas wave (4) is assuming the shape of the extended flat.

Its ending is possible above the key pulse point in May-June, 2009 (intermediate check point — January-February, 2008).

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If the supposition is correct it is quite logic to expect that wave (4) in the shape of the flat will follow alternation guidelines for flats (see table 4-2 of my book). In this case it is more probable that wave C of (4) will assume the shape of the wide diagonal triangle having given Complex-Simple-MostComplex shape to the whole flat.

Currently waves correlation within the supposed flat corresponds to the optimum one (B=~A*1.27). Wave B of (4) ending is the critical level for the main variant.

Though legs correlation of zigzag B of (4) is far from usual ([c]=~[a]*4.236), that is why the price may follow the alternate scenario.

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According to the alternate scenario global impulse [A] is almost completed. Its high will indicate the price upward reverse for the expected long-term uptrend.

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Chances of this scenario are as high as those of the main one and the main arguments in its favor are violence and proportions of wave 3 of (5) of [A], as well as the fact that the price is within the narrow trend channel of impulse [A].

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That is why the scenario will be chosen in the knot which is forming now. Supposedly, upward wedge (i) or (a) forming is almost completed. According to the rules after correction (ii) or (b) either upward impulse or diagonal triangle (iii) or (c) should form.

If the critical level is not broken and expected impulse (iii) forms and exceeds the length of wedge (i) 1.618 times and more it is logic to expect that the main scenario will prevail.

If upward zigzag (a)-(b)-(c) forms with almost equal legs and/or the critical level is broken chances of the alternate scenario will increase greatly.

We should wait what scenario the price will choose.

Supplement (June 23, 2007)

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Supposed USD weakening may affect CAD (see article Alternate but Real Weakening of the Dollar till the End of Summer (or the End of 2007). In this case chances of the earlier described variant increase significantly. Supposed wave [A] may complete above the key pulse point at the end of August. Though the area of projected values for impulse [A] completion should be calculated once wave 4 of (5) of [A] completes.

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According to the next alternate scenario continuous forming of supposed wave 4 of (5) of [A] with global impulse [A] completion not earlier than at the end of 2007 may be expected. The area of the projected values for impulse [A] completion should be calculated once wave 4 of (5) of [A] completes.

Supplement (June 27, 2007)

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One of possible scenarios of the wave counting marking of this area of CAD supposes that upward wedge (a) has formed (within the frames of the wave counting marking according to scenario «alternate-2»). Once correction (b) completes it is quite logic to expect that upward impulse (or diagonal triangle) will keep forming.

Forming of waves (a) and (b) fits the three scenarios under consideration. But once correction (b) completes price will have to choose one of the three most probable from my point of view ways in the supposed point (c) of [w].

Supplement (June 28, 2007)

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According to a possible marking variant of this area of CAD movement forming of upward impulse (or diagonal triangle) (c) of [w] may be expected once correction (b) of [w] completes.

Waves (a) and (b) forming fits the three described scenarios. Once correction (b) completes the price will have to choose one of the three most probable from my point of view variants in the supposed point (c) of [w].

Supplement (July 17, 2007)

Supposedly the price has chosen the alternate scenario, considered in details in this article. In accordance with this scenario global impulse [A] is almost completed. Great chances of this scenario were based on the wave structure, waves correlation and impetuous price fall.

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Impulse [A] may be almost completed. The basis of this supposition is shown on the next chart.

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May be wave 5 (or wave [v] of 3 of the possible alternate variant) has assumed the shape of the diagonal triangle with the longest first wave [i] of 5. If the supposition is correct it provides us with the limit level at 1.0394 which should not be broken by the price (wave [iii] should not be the shortest one). Otherwise, the current wave counting will be adjusted.

Supplement (August 9, 2007)

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According to a possible variant of CAD wave counting global downward movement may be completed. Supposedly, after diagonal triangle 5? upward zigzag W is forming. If the supposition is correct survey wave counting may look as it is shown in the next picture.

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Global impulse [A] completion may be confirmed by price rise and fixing above 1.12 (ending of supposed wave [iv] of 3 of (5) of [A]). Till that time its fourth wave 4 of (5) of [A] may be forming.

Supplement (September 20, 2007)

Currently price Currently price fluctuations remain within the forecast (see pictures 16 and 17 below).

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Supposedly, final wave 5 of (5) of global impulse [A] is forming. Possible levels of its completion are marked in the chart. The projected area of wave [v] of 5 of (5) of [A] completion should be specified once wave [iv] of 5 of (5) of [A] finishes.

At the same time according to the alternate variant wave 4 of (5) may keep forming in the shape of the running or extended flat.

Supplement (October 3, 2007)

CAD is moving in accordance with the forecast.

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Supposedly, the final impulse 5 of (5) of [A] is forming. Possible targets are given in the chart. The area of the projected values of wave 5 of (5) ending should be adjusted once wave [iv] of 5 of (5) completes.

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In the picture one of possible variants of wave counting of the final wave 5 of (5) is given. Correction [iv] of 5 may have started forming (if wave (v) of [iii] does not begin to lengthen). If the supposition is correct it is most probable that wave [iv] of 5 ending won't surpass 1.02 level.

Supplement (October 15, 2007)

CAD is moving accprding to the forecast.

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In the picture two possible variants of marking of the final wave 5 of (5) are given. Wave (v) of [iii] of 5 may have decided to lengthen (it was mentioned in the previous supplement to the article). If the supposition is correct it is most probable that wave [iv] of 5 ending will not overcome 1.02 level.

Supplement (October 24, 2007)

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In the picture two possible variants of marking of the final wave 5 of (5) are given. Limits for wave (v) of [iii] of 5 lengthening are almost over. If the supposition is correct corrective wave [iv] of 5 may start forming in the nearest future. It will aim at 0.99 level, though it should not overcome 1.02 level.

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Possible survey marking of the final wave (5) of [A] of CAD is given in picture 23.

Note

Given possible trading plans are purely informational purpose only and they should not be considered as trading guides or an invitation to make a transaction.

Reference:

• Imaginary Skewer
• Possible Nearest Perspectives of the Major Currency Pairs
• Check point. USD fall may continue till May 2007
• Check point. Normal flight.
• Possible Perspectives of the European currencies for 2007
• CAD Nearest Perspectives (USD/CAD)
• Never-ending Ascension (EUR/JPY)
• Check Point, Intermediate Results and Nearest Perspectives
• Nearest Projections of GBP/JPY (+EUR/JPY)

• FOREX Forecast for 2007
• Monthly-0607

• Wave analysis
• Elliott's Code: Wave Analysis of the FOREX Market
• Wave Counting Marking
• Methods of Price Movement Projection (EWA)
• How to Apply EWA Forecasts

Dmitry Voznuy
forDmitry@yahoo.com

June 22, 2007

When using any part of the article for publication or analytical materials reference to the author and Alpari is obligatory.