In $/cad in the longer term, the market remains within its extended period of ranging with a slight downward bias for the last year (large bearish channel, see weekly chart below). Still seen as a large bottoming, but with some risk for more ranging and even a retest (and slight break) of the April low at .9935. However, the market has strengthened at a time when "cycles" pointed lower (into the end of the month for most "risk" markets, and is a potential sign of underlying strength), while there is some chance for a further upside acceleration ahead (see shorter term below), and in turn has raises the likelihood that a more important bottom is already in place at .9935. Switched the longer term bias to bearish last Feb 12th at 1.0525 and given the increased risk that a more important bottom is already in place, would switch to neutral here (currently at 1.0600). Note too, would also switch the bias to the bullish side on a close above the ceiling of the channel (currently at 1.0715/40).
Nearer term, the market is higher from the Aug 5th low at 1.0115 and after potentially completing a 3 wave correction from the May 28th high at 1.0850 (A-B-C). This in turn raises some potential for a further upside acceleration ahead (within wave iii from the 1.0115 low) of a larger wave 3 (from the April low at .9935, see numbering on daily chart/2nd chart below). Within Elliott Wave analysis, these are generally the most "explosive" part of a cycle (3rd of 3rd waves). Note too that the nearer term upside pattern is not "complete", suggesting at least some further upside ahead But the confidence of a bigger picture surge upward is not extremely high currently, mostly due to the length of time of the correction from the May high (twice as long as the upmove from April), as they will generally tend toward equality "time-wise". In either case, at least some further upside is favored and with the chance for a sharp move higher, would buy here (currently at 1.0600). Initially stop on a close back below the recently broken bearish trendline from May (currently at 1.0455/70), but will want to switch to something more aggressive on further upside or especially if the market fails to resume the uptrend over the next few days (would start to lower the likelihood of the bullish outlook). Nearby support is seen at 1.0555/65, while resistance is seen at the earlier 1.0655/50 high. Note only temporary resistance (and 75 tick fall) on the Aug 17th short at 1.0325, before stopping on yesterday's close above the bearish trendline since May (then at 1.0475, closed at 1.0520).
Nearer term, the market is higher from the Aug 5th low at 1.0115 and after potentially completing a 3 wave correction from the May 28th high at 1.0850 (A-B-C). This in turn raises some potential for a further upside acceleration ahead (within wave iii from the 1.0115 low) of a larger wave 3 (from the April low at .9935, see numbering on daily chart/2nd chart below). Within Elliott Wave analysis, these are generally the most "explosive" part of a cycle (3rd of 3rd waves). Note too that the nearer term upside pattern is not "complete", suggesting at least some further upside ahead But the confidence of a bigger picture surge upward is not extremely high currently, mostly due to the length of time of the correction from the May high (twice as long as the upmove from April), as they will generally tend toward equality "time-wise". In either case, at least some further upside is favored and with the chance for a sharp move higher, would buy here (currently at 1.0600). Initially stop on a close back below the recently broken bearish trendline from May (currently at 1.0455/70), but will want to switch to something more aggressive on further upside or especially if the market fails to resume the uptrend over the next few days (would start to lower the likelihood of the bullish outlook). Nearby support is seen at 1.0555/65, while resistance is seen at the earlier 1.0655/50 high. Note only temporary resistance (and 75 tick fall) on the Aug 17th short at 1.0325, before stopping on yesterday's close above the bearish trendline since May (then at 1.0475, closed at 1.0520).
