As I have been studying both and (XABCD) patterns, I have noticed that often the XABCD pattern, in it's various forms, can be used to provide confirmation of our count.
On this one hour chart, I have labeled a five wave motive wave, and have plotted the Alexander posted earlier. It isn't perfect, in that wave 4 does slightly spike into wave 1 ( allows for this rarity in leveraged markets). Notice that in this case, THE STARTS at the end of 2. Also, observe that - and this is critical, WAVE X MARKS THE FORMATION OF 3-4-5. Why is this important? Because if we can identify a true completion of a five motive wave, we can forecast with a fair amount of certainty the next move.
Eliot says the the corrective wave A-B-C often extends down into or just beyond wave 4 of the previous motive wave up, and wave 2 retraces 61.8% of previous wave 1 - THIS IS IN THE AREA OF Alexander's end point D of his pattern. Which, if his pattern completes, we have also completed 8 wave cycle, which means the next move up will mark the beginning of wave 1 AND wave 3 of the next higher degree.
detractors point out, rightly so, that wave counting is susceptible to multiple interpretations, and too subjective to be relied upon. Anything we can do to minimize the subjectivity is a good thing. XABCD patterns, with their precise fib math and rules, provide one way to do this, and I am finding this very helpful.
Forecasting whehter in weather or the markets is never 100%, so everything we do should increase the accuracy of our forecast. In this case, I think USDCAD is going to higher - once it reaches the area of point D.