**Elliott Wave Analysis on USD/CAD – September 8, 2025**
*By Ewminteractive.com – A Comprehensive Breakdown of the USD/CAD Long-Term Structure with Supplementary Market Insights*
The USD/CAD currency pair has remained a pivotal focus for traders due to its reflective nature of both macroeconomic policies in the United States and Canada and the broader commodity market cycles, particularly oil prices. Using Elliott Wave theory, a popular form of technical analysis based on cyclical wave patterns within markets, analysts at EWM Interactive recently published a detailed long-term outlook for the pair, dated September 8, 2025.
This article will take a deep dive into that analysis, recap the theoretical foundation, and expand upon it using current macroeconomic indicators and other technical frameworks to form a robust understanding of USD/CAD’s potential trajectory.
## Elliott Wave Theory: A Background
Developed by Ralph Nelson Elliott in the 1930s, Elliott Wave theory posits that financial markets follow a repetitive, fractal wave pattern driven by investor psychology. The theory divides market movements into:
– **Impulsive waves (1, 2, 3, 4, 5):** These waves represent the main trend direction
– **Corrective waves (A, B, C):** These move against the main trend
A complete Elliott Wave cycle typically spans eight waves: five motive waves followed by three corrective waves. In practice, waves often form fractally, meaning smaller patterns replicate within larger ones.
EWM Interactive applies Elliott Wave guidelines along with Fibonacci ratios to forecast currency trends—an approach highlighted in their coverage of USD/CAD.
## Long-Term Elliott Wave Outlook: USD/CAD
According to the article by EWM Interactive, USD/CAD completed a major Elliott Wave cycle years prior and has since been working its way through a corrective phase. Here’s a breakdown of their perspective:
### 1. Completion of Cycle from 2002 Low to 2016 High
– The long-term uptrend in USD/CAD, seen from the 2002 low to the January 2016 high at around 1.4689, represents a five-wave impulse pattern.
– According to Elliott Wave labeling convention, that move was identified as:
– Wave 1 (2002–2007)
– Wave 2 (2007–2011)
– Strong Wave 3 (2011–2015)
– Wave 4 (a shallow correction)
– Final Wave 5 culminating in early 2016
This prime wave marked the completion of a loud and clear bullish cycle in the pair, hinting that a large-scale correction should be expected afterward.
### 2. The Ongoing Corrective Structure Since 2016
– Since peaking in 2016, USD/CAD has been in a complex, overlapping correction, expected to unfold as a standard A-B-C structure:
– Wave A: A sharp drop into 2017
– Wave B: A prolonged and choppy recovery peaking in early 2020
– Wave C: An extended decline suggesting a move below 1.2000 is plausible
EWM Interactive suggests that there’s an unfolding five-wave pattern within Wave C, which would ideally complete the corrective phase. Based on wave counts, the currency pair might be in the midst of Wave 3 of C.
### 3. Target Levels and Fibonacci Implications
– Fibonacci relationships are critical to Elliott Wave analysis:
– Wave C often relates to Wave A in both time and amplitude. A typical target would be for Wave C to equate to Wave A in length or be 1.618 times larger.
– Applying this logic, USD/CAD could realistically decline to the 1.1500–1.1800 range before a sustainable reversal could occur.
– Fibonacci retracements also point out specific areas of support seen near:
– 1.192
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