Last March 12th, 2014, I defined the following preliminary targets:
1 - 1.11998
2 - 1.14694
These targets remain in force and in sight, based on a combination of technical validations, namely:
1 - A potential Wave-4 completion of a diagonal triangle
2 - Added validation of a long-term channel at recent rally point
3 - Model remains , but calls for interim decline
1 - About 2 months ago, I released a pattern target @ 1.07445. While price has moved towards it, it remains incomplete. This comes in direct contradiction with above technical picture, since validation of this target would pull price out of the channel fenestration.
Use TradingView's replay feature to see how well price action has moved towards said target
- Target released:
2 - While model remains , the interim decline could break below the recent structural lows, thus invalidating above technical-based analysis. In doing so, it would affirm the robustness of the model, though, which in the H4 timeframe did define 1.07445, but in the daily frame sees higher highs.
Based on the third point above, a signal remains pending. However, considering the disproportionate amount of classic pattern traders I am assuming exists, I thought it was worth highlighting the recent technical picture, which seems to support a continuation of the price action upwards, based on simple pattern ( and channel).
As indicated earlier, the model remains , but does call for an interim relaxation to the downside. I expect price action to remain above recent lows - Directional signal will be kept at "Neutral" until signal falls in line and reinforces the dominant technical picture.
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* * * Watch for the Elliott Wave Flat development in DAILY chart * * *
As I mentioned earlier, there is a potential for a significant correction at this point. This would potentially occur on a pure technical basis, via the hand of a large Elliott Wave Regular Flat, where a series of internal 3-3-5 waves have so far completed the first two of the overall pattern.
What we are looking at this point is an impulsive move AGAINST the major trend, which would tell you for sure that this Flat is underway. One way to consider an entry here would be to let Wave-1 express itself, reverse to Wave-2 (which should NOT exceed the origination point of Wave-1 at 1.12697, and enter at the break of Wave-1's termination point.
Considering that we are dealing with a DAILY chart, it might take a little while before this set up comes into actionable shape.
For those interested in the development of this flat, I will continue to provide technical commentaries in the chart in which it has been featured 23 days ago - Here is its link:
Per model, $USDCAD is set to take a 2-step advance, one that would find entrenched bearish resistance at 1.14299, and a stronger resistance at 1.21988.
I will produce a chart once this one has consumed all targets within its price field
For the time being, watch for a significant correction (low probability at the current level). A large institutional bank has taken a LONG position here as of 1.1200 (Credit Suisse; Long position; Medium Term).