Title: Elliott Wave Analysis of USD/CAD: Outlook and Forecast as of July 23rd, 2025
Author: EWM Interactive
As of July 23rd, 2025, the USD/CAD currency pair continues to be a focal point for traders seeking opportunities rooted in technical analysis. According to a recent update from EWM Interactive, the Elliott Wave framework reveals compelling information about the pair’s price behavior. By dissecting the pair’s long-term and short-term structures, we can gain better insight into possible price developments in the second half of 2025 and beyond.
This article outlines the important takeaways from the latest update, describes the wave formations in detail, and provides potential scenarios based on wave theory, market psychology, and Fibonacci relationships. All interpretations are grounded in the work of the original article by EWM Interactive.
Overview of the Current Elliott Wave Structure
Elliott Wave Theory is a tool for interpreting crowd psychology through recurring price movement patterns. Under this framework, price evolves in repeating cycles of five-wave impulsive movements followed by three-wave corrective movements. Applying this methodology to USD/CAD, a multi-year Elliott Wave pattern becomes clear.
– The long-term wave structure begins from the January 2021 low at 1.2000.
– From that low, the pair is believed to have initiated a five-wave impulse to the upside.
– Wave (1) completed near 1.2940 in June 2021.
– Wave (2), a corrective phase, bottomed at approximately 1.2285 in October 2021.
– Wave (3) extended sharply upwards to about 1.3970 in October 2022.
– Wave (4), a counter-trend movement, retraced towards 1.3100 until March 2023.
– Wave (5) appears to have topped at around 1.3860 in October 2023.
This five-wave movement from 1.2000 to 1.3860 marks a completed cycle, leading to expectations of a larger-degree correction or reversal. The implication is that a significant downtrend, at least in the medium term, may follow.
Interpretation of the Five-Wave Sequence
Each wave in the Elliott Wave model can be broken down into subwaves. In the case of USD/CAD:
– Wave (3) was the strongest, extending well beyond the length of Wave (1), which aligns with standard Elliott Wave guidelines.
– Wave (4) demonstrated a typical zigzag corrective form, appearing as an A-B-C structure that respected Fibonacci retracement levels.
– Wave (5), while still bullish, lacked the momentum of Wave (3), fitting the pattern of a terminal fifth wave characterized by divergence in momentum and volume indicators.
Once Wave (5) concluded at 1.3860, an A-B-C corrective model began developing, which now governs USD/CAD’s structure.
Corrective Development: The A-B-C Structure
According to EWM Interactive’s analysis, the market has since transitioned into a correction:
– Wave A of this correction saw a decline from 1.3860 to around 1.3120 by March 2024.
– Wave B retraced part of that move, climbing to approximately 1.3570 by June 2024.
– Wave C appears to be in development and bears watching, expected to extend to the downside.
This A-B-C movement is a classic flat correction, identified by equal-length legs or slight extensions of Wave C compared to Wave A. In many cases, Wave C can exhibit impulsive characteristics even though it appears in a correction.
– The projected target for Wave C is around 1.2800 or lower, aligning with Fibonacci projection zones.
– Should Wave C mirror the length of Wave A, the downside could test major support between 1.2700 and 1.2800.
– Momentum indicators and volume analysis suggest a weak USD, supporting the bearish continuation
Read more on EUR/USD trading.