In article
CAD possible perspectives till 2008 and further (EWA of USD/CAD) on March 23, 2006 perspectives of CAD movement were described:
- Expected downward trend reverse around 1.1750.
- Forming of supposed downtrend up to 1.0610 with several intermediate targets (1.1040, 1.0850).
- Once 1.1079 is tested wave correlation of the alternate scenario applies a classical value.
I would like to note that trend reversed downwards at
1.1770. Moreover the first intermediate target has been already reached (the minimum value is 1.1029), currently the price has stopped at 1.1047.
As during almost a half of the year once the article was released new data appeared and new wave patterns were formed, it would be logical to check and adjust current project targets. The main variant remained unchanged and it was described in details in March. That is why let us refer to the
alternate scenario, mentioned in the March article in passing. Moreover, price has reached 1.1079 when supposed wave
(3) of the alternate variant becomes 4.237 times (Fibo) longer than wave
(1).
From the point of view of the
nearest price movement and specification of the point of upward trend reverse, the main and the alternate scenarios do not contradict each other, they differ in the shape and depth
of the price movement following upward reverse.
Figure 1. Wave counting draft on the weekly chart.
In Figure 1 alternate scenario is given. In accordance with this variant supposed wave
(3) of the global downward impulse is almost completed. It represents an impulse with extension in the first wave
1. Thus in case the supposition about the wave picture is correct, the fifth wave
5 should be the shortest wave among the valid waves of impulse
(3). The limit value for the fifth wave is given in the chart in the shape of the red dashed line (
1.0447).
Wave
5 of (3) is interesting, it represents quite a rare example of
expanding diagonal triangle (Figure 2) as its waves
[i] and
[iv] do not overlap. Such an example was published in the famous book of Alfred J. Frost and Robert R. Prechter (Lesson 5, figures 1-18).
Figure 2. Wave counting draft on the daily chart.
Skewed triangle acts as the fourth wave
[iv] of 5 of the supposed diagonal triangle (wave
5), emphasizing that the pattern will complete soon. Moreover,
zigzag or its derivatives are the most widely spread patterns in the triangle, whereas the fifth wave
[v] of 5 is supposed to be assuming the shape of the zigzag
(a)-(b)-(c), currently its final leg
(c) of [v] of 5 is forming.
Possible projected targets are given in the chart in the shape of the red-yellow ellipse. These projections were calculated with the help of the
main waves of the diagonal triangle and first waves
(a) and
(b) of zigzag
[v] of 5.
At the same time two active waves of the final impulse
(c) of [v] may be already formed (waves
i and
iii), with their help kind and targets of CAD final movement may be
specified (Figure 3).
Figure 3. Wave counting draft on the 720min chart.
In Figure 3 CAD price movement after March forecast is given. In case zigzag
[v] assumes the shape with the classical waves correlation (that is,
(c) = (a)), completion of its second leg may be expected around
1.0616.
Moreover, judging by current wave structure of impulse
(c) of [v] we may assume that its waves
i,
ii and
iii have been already formed. In case the supposition is correct approximate equality of waves
i and
iii is obvious. In this case it is logical to expect the final impulse
v of (c) to form in the shape of the
extension that makes this area attractive for short positions opening once corrective wave iv is completed.
Figure 4. Wave counting draft on the 240 min chart.
Taking into account the fact that the depth of wave
ii of (c) made 51% (Figure 4), in virtue of the alternation guideline we may assume that correction
iv of (c) will not be deep and will complete between 1.1090..1.1140 (24%..38%). Moreover, wave
i of (c) (1.1172) completion is the critical level for this wave counting. It is most probable that expected wave
iv of (c) will assume the shape of a shallow horizontal extended correction.
In case suppositions are confirmed (
and these are just suppositions), USD/CAD downward movement may complete around
~1.0650 practically in synchrony with the European currencies (refer to
Monthly-0906).
Addition (September 29, 2006)
Figure 5. Wave counting on the daily chart.
According to the variant in Figure 5 wave
(b) of [v] of the final zigzag of diagonal triangle
5 is assuming the shape of the
horizontal triangle.
Targets adjustment with the help of the main waves of zigzag
[v] is reasonable only after wave
(b) completion. Preliminary, wave
(c) of [v] ending may get into the projected area if its length makes about 62%... 78% of wave
(a) of [v] length.
Reference
Dmitry Voznuy
forDmitry@yahoo.com
September 3, 2006
The ideas given above are purely informational purpose only. This report was translated by Natalya.
Do not reproduce without explicit permission of Alpari.
