Is the USD move against EUR and CAD over-extended?

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The USD made yet another move higher across the board yesterday after the FOMC meeting minutes, while stocks also found some support. However, the latest leg of the USD against the majors is extended and can be a final one within a larger impulsive price action. So, traders must be aware of trend reversals.

On EURUSD we have been looking down to 1.3250/65 in the last few days. A target that has been reached a few sessions back. In fact, a decline from 1.3410 can be counted in five waves, so a bounce may follow soon; a bigger one if we consider that the latest leg down is wave (v). However, only price can confirm the count, so we need to see 1.3296 broken to confirm a temporary change in trend. Generally speaking, EURUSD is still bearish, but because of a very deep price and because of the wave structure we do not see it in good position for any new shorts, not even longs.

EURUSD 1h Elliott Wave Analysis

EURUSD Elliott Wave Analysis August 21 2014 technical outlook for currency trading

USDCAD is also on the move this week, away from 1.0857 where we labeled the end of wave (iv), so a rally should unfold in five waves. Well, a new high has already been achieved, so the upside in wave (v) can be limited. We are looking at 1.1000 as potential resistance. In the mean-time, any set-back to 1.0930/1.0940 should be corrective.

USDCAD 1h Elliott Wave Analysis 

USDCAD Elliott Wave Analysis August 21 2014 technical outlook for currency trading

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About Author

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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