**Elliott Wave Analysis of USD/CAD: Outlook as of September 8, 2025**
*Original content inspired by EWM Interactive*
The USD/CAD has experienced several significant price fluctuations over recent months, navigating key technical zones and displaying a complex Elliott Wave pattern. As of early September 2025, the US Dollar to Canadian Dollar exchange rate continues to respond to a mix of economic fundamentals, policy divergence between the Federal Reserve and the Bank of Canada, and broader sentiment about inflation, energy prices, and risk appetite.
In this analysis, we will dissect the Elliott Wave count, examine price action across time frames, and integrate key macroeconomic influences impacting the USD/CAD pair. We’ll explore both the completed patterns and future projections while noting critical retracement areas and potential invalidation levels based on wave theory.
## Key Market Context for USD/CAD
Before delving into the chart patterns, it’s essential to establish the macroeconomic backdrop as of Q3 2025:
– **US Monetary Policy**: The Federal Reserve has maintained moderately tight policy to anchor inflation, though recent disinflation trends have led to increased speculation about rate cuts in early 2026.
– **Canadian Economy and BoC Policy**: The Bank of Canada adopted a slightly more dovish stance compared to the Fed, citing sluggish wage growth and weak GDP expansion.
– **Oil Prices Impact**: As Canada is a major oil exporter, fluctuations in crude oil prices directly affect the Canadian Dollar. Rising oil prices tend to strengthen CAD, while falling oil prices may weaken it.
– **Risk Sentiment**: Broader global risk sentiment has remained mixed, with equities hovering near cycle highs, but ongoing geopolitical tensions in Eastern Europe and the South China Sea elevate volatility, contributing to intermittent USD strength as a safe haven.
## Elliott Wave Count Summary: Long-Term View
Elliott Wave Theory posits that market prices move in repetitive cycles or “waves” driven by investor psychology. Each complete Elliott cycle typically consists of five motive waves (trending) followed by three corrective waves.
On the long-term USD/CAD chart, a large corrective structure appears to be taking form based on the following analysis:
### Primary Degree Count (Weekly Chart)
– The multi-year impulsive rally from the 2011 low to the 2020 high likely concluded with a primary wave (V) at approximately 1.4667.
– Since then, the pair has entered a primary corrective cycle in the form of an *A-B-C* flat or expanded flat.
– Wave A ended near 1.2000 in late 2021.
– Wave B has retraced a significant portion of Wave A, culminating at near 1.3970 (early 2023), likely subdividing into a zigzag pattern.
– The pair is now in the midst of Primary wave C, anticipated to unfold in five sub-waves to the downside, aiming toward or below the 1.2000 region once more.
## Intermediate and Minor Degree Waves
Taking a closer look at the daily and 4-hour timeframes reveals the internal structure of the current move down:
### Intermediate Degree (Wave C)
Wave C, being a motive wave to the downside, is expected to form a five-wave pattern marked as:
1. **Wave (1):** Decline from around 1.3970 to 1.3170 (mid-2023).
2. **Wave (2):** Corrective bounce to around 1.3675, completed in August 2023.
3. **Wave (3):** The strongest wave, declined sharply to 1.2980.
4. **Wave (4):** Current positioning suggests that minor wave 4 concluded near 1.3220.
5. **Wave (5):** Currently underway as of early September 2025. Projected to target the 1.2700 – 1.2500 zone, depending on
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