USDCAD Elliott Wave Analysis: A Technical Outlook into Potential Movements
Originally published by EWM Interactive, the August 11th, 2025 Elliott Wave analysis of the USD/CAD (U.S. Dollar/Canadian Dollar) currency pair offers important insights into potential market direction using technical forecasting strategies. This article expands on that original analysis, incorporating foundational Elliott Wave principles, current fundamental macroeconomic factors influencing both currencies, and credible supplementary forecasts to present a comprehensive picture of where the USDCAD could be headed next.
EWM Interactive remains a reputable source for wave-based forecasting, applying the Elliott Wave Theory to map out underlying price structures, possible support-resistance levels, and probable trade setups.
Overview of Elliott Wave Applied to USDCAD
For traders utilizing technical analysis, the Elliott Wave Theory offers valuable insight into market psychology and behavioral cycles, especially in forex trading where directional movement is often driven by expectations.
Below is a concise explanation of how Elliott Wave Theory works:
– The Elliott Wave Theory suggests that markets move in repetitive cycles, primarily influenced by investor sentiment.
– Each full wave cycle consists of five movements in the trending direction (known as the impulse phase) followed by three retracement or corrective waves.
– The labeling of these movements involves numerals (1 through 5) for the impulse waves and letters (A, B, and C) for corrections.
– Within each larger cycle, smaller waves of the same structure unfold, creating what is known as the fractal nature of the wave series.
Applying this approach to USD/CAD, the wave count becomes essential in identifying reversal signals and locating confirmation points that indicate trend continuation or correction.
EWM Interactive’s 2025 Wave Structure Summary
EWM Interactive’s August 2025 analysis emphasizes the emergence of a bearish corrective pattern unfolding in the USDCAD currency cross. The main findings are summarized as follows:
– The long-term downward trend was identified as part of a corrective cycle initiated after the exhaustion of a five-wave impulse structure, peaking earlier in 2024.
– Based on their labeling, the current price movement likely falls under either an unfolding C wave or wave (C) of a larger corrective A-B-C cycle.
– The internal structure of the current wave is described as a clear five-wave decline, which EWM denotes as indicative of the current leg being impulsive, reinforcing the bearish outlook.
– A longer-term chart reveals evidence of interconnectivity between higher-degree wave structures and the ongoing smaller corrections, highlighting the pair’s likely continuation on the downside before any significant recovery attempt.
Key Technical Levels Noted:
– Resistance was identified just below the 1.3800 area, based on previous market reactions and Fibonacci retracement alignments.
– Support was projected around 1.3100, where buyers previously entered the market during earlier corrective waves.
– Ideal bearish extension could take the pair near or below the 1.3000 psychological level if the wave count sustains its structural integrity.
Fundamental Factors Surrounding USD and CAD
It is critical to combine Elliott Wave Theory with broader macroeconomic data, especially since market sentiment can be heavily influenced by changing economic and geopolitical landscapes.
United States Macro Overview:
– The United States Federal Reserve has remained hawkish into 2025, maintaining higher interest rates to combat inflation, albeit at a slower pace than 2023–2024.
– July 2025 CPI data confirmed moderating inflation, suggesting that the Fed may begin exploring rate cuts later in the year. This scenario injects bearish risk to the U.S. dollar.
– Job growth has remained slightly below expectations, further feeding speculation that monetary policy could shift towards loosening.
– Market participants are also closely watching the 2025 U.S. presidential cycle, which often causes fluctuations in USD-backed assets, including forex pairs like USDCAD.
Canada Macro Overview:
– The Bank of Canada (BoC) has leaned into a more dovish policy stance, openly signaling rate stability unless inflation
Read more on USD/CAD trading.