USD/CAD analysis

 From an Elliott wave perspective it seems like we a tracing out a flat correction from the 2011 highs. The key pattern that screams out "correction" is the wave B triangle that occurred in the wave (A) down of this flat. My alternate count is that we traced out a double zigzag correction which would mean that the correction is complete. What I don't like about that count is that the wave C of the second zigzag down is quite large relative to the A wave. The count presented above is the one that satisfies the rules and guidelines of the wave principle. The leading diagonal wave 1 signaled an extended 3rd wave to come in wave C which is what occurred (wave 3 being almost 2.618 of wave 1). Ideally this is where one would expect that wave 4 bounce to stop since we are in the area of the previous 4th wave, we are also at the upper boundry line of the corrective price channel, we are also at the 38.2% retracement of the wave 3 decline and the AO indicator made it above the zero line which one would expect in a 4th wave bounce. I wouldn't suggest shorting this currency pair since the 5th wave I'm expecting is likely to be a small decline considering the extended 3rd wave. Now lets add in some standard technical analysis

Looking at this weekly chart it seems evident that there very well might be an inverse head and shoulders pattern in this currency pair. If you look closely you'll notice that it formed 2 heads making it of the complex type. If you are a conservative long term trader you can wait for a breach of the neckline of this pattern before going long for a sizable move to the upside. It could take months to get there but it increases the probability of a successful trade.

Regards,
Ahmed Farghaly