Title: Elliott Wave Analysis of USD/CAD – Forecast and Outlook as of August 18, 2025
Original Author: EWM Interactive
Reference: https://ewminteractive.com/elliott-wave-analysis-usdcad-august-18th-2025
The Elliott Wave Theory is one of the most widely used tools in technical analysis because of its unique approach to understanding market psychology through wave structures. In this analysis of USD/CAD published by EWM Interactive on August 18, 2025, the theory is applied in a comprehensive manner to interpret market movements and project possible future price paths based on clearly defined wave formations.
Overview:
USD/CAD, a widely traded currency pair in the Forex market, has experienced notable fluctuations in recent trading sessions. Traders and analysts following the Elliott Wave framework are paying close attention to the pair’s mid- and long-term wave structure to uncover potential trends. The analysis by EWM Interactive emphasizes the corrective phase that has emerged in the past several months within the broader uptrend that originated in mid-2021.
This article will break down the key points and projections found in the original Elliott Wave analysis and elaborate on the technical implications for traders aiming to navigate the future of USD/CAD based on the wave principle.
1. Long-Term Structure – Impulse and Correction
– The analysis identifies an impulsive five-wave rally from the June 2021 USD/CAD low to the October 2022 high near 1.3975.
– According to Elliott Wave guidelines, this five-wave advance constitutes a motive wave, suggesting that the larger trend direction is to the upside.
– Upon completion of wave (5), the pair began a decline that transitioned into a clear corrective structure.
– The ensuing decline is interpreted as a complex correction within wave (2) or wave (B), depending on the interpretation stage.
2. The Corrective Wave – A-B-C or W-X-Y?
– After reaching the October 2022 high, USD/CAD entered a correction phase, manifested through a clear three-wave movement.
– The initial drop is labeled wave A (or W), followed by a recovery representing wave B (or X).
– The second leg of the correction, wave C (or Y), developed in a distinctive downward-sloping pattern as the market retested previous support zones.
3. Triangle Pattern within the Correction
EWM Interactive identifies a significant Elliott Wave triangle pattern forming as part of the correction. The characteristics of the triangle are:
– A converging structure made up of five sub-waves labeled A-B-C-D-E.
– Each leg within the triangle subdivides further into smaller three-wave formations, highlighting the proper structure of a triangle correction.
– The triangle appears to be taking shape within the broader wave (4) of the ongoing five-wave motive development from higher degree.
– The apex of the triangle represents a significant price contraction zone, indicating an imminent breakout.
4. Implications of the Completed Triangle
– A typical feature of Elliott Wave triangles is that they occur in wave four positions ahead of the final fifth wave rally or decline.
– With the triangle appearing to complete, the next wave—wave (5)—is anticipated to resume in the direction of the main trend.
– The completion of wave E within the triangle suggests a market poised for a bullish breakout toward or above the October 2022 high of 1.3975.
– A post-triangle thrust is expected to unfold in a five-wave impulsive advance, targeting a potential range from 1.4100 to 1.4300 based on Fibonacci projections.
5. Key Technical Levels to Monitor
Traders and analysts focused on quantitative trading frameworks should keep an eye on the following support and resistance levels based on the Elliott Wave map:
– Support Levels:
– 1.3130: Near the base of the triangle structure.
– 1.3000: A psychological level and former low of wave C.
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