EUR/CAD is presenting a compelling long setup as what appears to be a five-wave impulse from the June lows looks ready for its final leg higher. The structure shows a classic wave 4 correction that has found support right where Elliott Wave theory suggests it should—setting up a potential wave 5 that could deliver solid risk-to-reward for patient traders.
What the Current Structure Shows (Primary Scenario)
Clean Five-Wave Impulse in Progress: The move up from the June 2025 lows has unfolded in a textbook impulsive pattern, with waves 1, 2, and 3 clearly defined and wave 4 appearing to have completed its correction.
Wave 4 Finds Support: The correction has retraced to a level that respects the typical boundaries for a fourth wave—not too deep to overlap with wave 1, but enough to provide a healthy pullback before the final push.
Wave 5 Setup: With wave 4 likely complete, the structure points to wave 5 beginning, targeting the equality relationship with wave 1 at 1.6170.
Why the Count Is Labeled This Way
The initial surge from the lows shows strong, impulsive characteristics with clear five-wave subdivisions.
Wave 3 extended beyond the typical 1.618 relationship with wave 1, which is common in strong trends.
The current level, at around 1.5927, represents a logical support zone where wave 4 should find its footing.
Trade Setup: Riding the Final Wave
Entry: Current levels, with wave 4 appearing to have bottomed.
Stop Loss: Below 1.5952—if price breaks this level, the wave count is invalidated and suggests wave 4 may be more complex or the entire structure needs reassessment.
Target: 1.6170, where wave 5 achieves equality with wave 1. This is a classic Elliott Wave projection when wave 3 has been the extended wave in the sequence.
What to Watch Next (Confirmation or Invalidation)
Confirmation: A break of the B wave termination point at 160.50 would be confirmation that wave 5 may have started.
Invalidation: A break below 1.5928 would suggest wave 4 is not complete and may be forming a more complex correction.
After Wave 5: Once the target is reached, expect a significant correction as the entire five-wave sequence from the June lows completes.
Alternate Count
If the current support fails, wave 4 could extend into a more complex correction—possibly a triangle or double zigzag—before wave 5 begins. This would delay but not necessarily invalidate the bullish scenario.
What the Current Structure Shows (Primary Scenario)
Clean Five-Wave Impulse in Progress: The move up from the June 2025 lows has unfolded in a textbook impulsive pattern, with waves 1, 2, and 3 clearly defined and wave 4 appearing to have completed its correction.
Wave 4 Finds Support: The correction has retraced to a level that respects the typical boundaries for a fourth wave—not too deep to overlap with wave 1, but enough to provide a healthy pullback before the final push.
Wave 5 Setup: With wave 4 likely complete, the structure points to wave 5 beginning, targeting the equality relationship with wave 1 at 1.6170.
Why the Count Is Labeled This Way
The initial surge from the lows shows strong, impulsive characteristics with clear five-wave subdivisions.
Wave 3 extended beyond the typical 1.618 relationship with wave 1, which is common in strong trends.
The current level, at around 1.5927, represents a logical support zone where wave 4 should find its footing.
Trade Setup: Riding the Final Wave
Entry: Current levels, with wave 4 appearing to have bottomed.
Stop Loss: Below 1.5952—if price breaks this level, the wave count is invalidated and suggests wave 4 may be more complex or the entire structure needs reassessment.
Target: 1.6170, where wave 5 achieves equality with wave 1. This is a classic Elliott Wave projection when wave 3 has been the extended wave in the sequence.
What to Watch Next (Confirmation or Invalidation)
Confirmation: A break of the B wave termination point at 160.50 would be confirmation that wave 5 may have started.
Invalidation: A break below 1.5928 would suggest wave 4 is not complete and may be forming a more complex correction.
After Wave 5: Once the target is reached, expect a significant correction as the entire five-wave sequence from the June lows completes.
Alternate Count
If the current support fails, wave 4 could extend into a more complex correction—possibly a triangle or double zigzag—before wave 5 begins. This would delay but not necessarily invalidate the bullish scenario.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.