EUR/CAD: Wave 5 Trade SetupEUR/CAD is presenting a compelling long setup as what appears to be a five-wave impulse from the June lows looks ready for its final leg higher. The structure shows a classic wave 4 correction that has found support right where Elliott Wave theory suggests it should—setting up a potential wave 5 that could deliver solid risk-to-reward for patient traders.
What the Current Structure Shows (Primary Scenario)
Clean Five-Wave Impulse in Progress: The move up from the June 2025 lows has unfolded in a textbook impulsive pattern, with waves 1, 2, and 3 clearly defined and wave 4 appearing to have completed its correction.
Wave 4 Finds Support: The correction has retraced to a level that respects the typical boundaries for a fourth wave—not too deep to overlap with wave 1, but enough to provide a healthy pullback before the final push.
Wave 5 Setup: With wave 4 likely complete, the structure points to wave 5 beginning, targeting the equality relationship with wave 1 at 1.6170.
Why the Count Is Labeled This Way
The initial surge from the lows shows strong, impulsive characteristics with clear five-wave subdivisions.
Wave 3 extended beyond the typical 1.618 relationship with wave 1, which is common in strong trends.
The current level, at around 1.5927, represents a logical support zone where wave 4 should find its footing.
Trade Setup: Riding the Final Wave
Entry: Current levels, with wave 4 appearing to have bottomed.
Stop Loss: Below 1.5952—if price breaks this level, the wave count is invalidated and suggests wave 4 may be more complex or the entire structure needs reassessment.
Target: 1.6170, where wave 5 achieves equality with wave 1. This is a classic Elliott Wave projection when wave 3 has been the extended wave in the sequence.
What to Watch Next (Confirmation or Invalidation)
Confirmation: A break of the B wave termination point at 160.50 would be confirmation that wave 5 may have started.
Invalidation: A break below 1.5928 would suggest wave 4 is not complete and may be forming a more complex correction.
After Wave 5: Once the target is reached, expect a significant correction as the entire five-wave sequence from the June lows completes.
Alternate Count
If the current support fails, wave 4 could extend into a more complex correction—possibly a triangle or double zigzag—before wave 5 begins. This would delay but not necessarily invalidate the bullish scenario.
