Title: In-Depth USD/CAD Wave Analysis – Outlook for August 28, 2025
Source: Original analysis adapted from MENAFN article “USD/CAD Wave Analysis – 28 August 2025.” All credit to the original author and MENAFN.com.
The USD/CAD currency pair continues to draw significant attention from traders due to evolving macroeconomic factors and technical chart patterns. As of August 28, 2025, the pair displays unique wave formations coupled with strong support and resistance zones that could define the market direction in the weeks ahead.
Below is an expanded wave-based analysis of USD/CAD, incorporating Elliott Wave Theory, fundamental economic data, and comparative outlooks from verified market sources. This article serves as a comprehensive guide for both short-term traders and long-term investors engaging with the USD/CAD currency pair.
Overview of USD/CAD Movement
USD/CAD, the currency pair reflecting the exchange rate between the US dollar (USD) and Canadian dollar (CAD), often reacts sharply to energy price trends, divergence in monetary policy by the Federal Reserve and the Bank of Canada, and economic indicators such as inflation, GDP growth, oil inventories, and employment data.
As of late August 2025, USD/CAD has approached a critical technical juncture after a strong medium-term rally. The pair is navigating a potential correction or consolidation phase, depending on upcoming economic events and sentiment momentum.
Wave Structure Review
Utilizing Elliott Wave Theory for our analysis of USD/CAD:
– The pair completed a full bullish impulsive five-wave structure higher from the 1.3100 low seen in late Q2 2025.
– The fifth wave appears to have terminated just below the 1.3900 psychological resistance level.
– Currently, a potential ABC corrective wave appears underway, as part of a larger wave IV pullback within a primary uptrend.
Detailed Wave Breakdown
Using hourly and four-hour price charts, the wave structure is identified as follows:
Wave I:
– Originated from the 1.3100 base
– Extended upward impulsively to reach about 1.3450
– Clear signs of motive wave characteristics: strong bullish candles, shallow retracements, volume confirmation
Wave II:
– Retraced back to the 1.3280 zone, respecting the Fibonacci 50 percent level of Wave I
– Zigzag corrective pattern (A-B-C down) confirmed through symmetrical leg structure
– Reversal near a prior resistance-turned-support level, signifying smart money interest
Wave III:
– Most aggressive bullish leg
– Carried price from 1.3280 up through 1.3700, indicative of wave extension dynamics
– Volume and momentum indicators (MACD, RSI) showed strong divergence at its top, typical of terminal third waves
Wave IV:
– Corrected gradually, reverting to 1.3575, aligning with the 38.2 percent retracement level
– Took the form of a complex flat or sideways triangle formation
– Less volatility but tested breakout levels for strength validation
Wave V:
– Completed the last upward phase reaching highs near 1.3890
– Wave V appears to be truncating or potentially forming a diagonal, as the momentum weakened
– Could symbolize the end of an intermediate cycle within a larger degree impulse
Post-Fifth Wave: ABC Correction
Following the possible completion of the impulsive phase:
– Wave A brought the pair down toward 1.3740
– Wave B retraced up modestly to the 1.3820–1.3840 zone
– Ongoing Wave C may continue to correct toward the 1.3650 or even the 1.3575–1.3600 cluster, a significant confluence zone formed by Fibonacci extensions and horizontal support
Fundamental Triggers Behind Recent Movement
The technical wave structure is underpinned by the following economic factors:
Bank of Canada (BoC) Monetary Policy:
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