USD/CAD Elliott Wave Signals Potential Reversal at 2nd Wave Top

USD/CAD is approaching a critical juncture as Elliott Wave analysis suggests the pair may be completing a second wave corrective top, setting the stage for a potential bearish third wave decline. The technical structure indicates that the recent USD/CAD rally could be nearing exhaustion, with wave counts pointing to a reversal pattern that typically precedes the most impulsive and extended move in the Elliott Wave sequence. The Canadian dollar's trajectory is closely tied to oil price dynamics and Bank of Canada policy expectations, both of which could serve as fundamental catalysts for the projected move. Key resistance at the identified wave 2 peak represents a critical level—failure to break above would confirm the bearish wave count and open the door to significant downside. Traders employing wave-based strategies should watch for reversal candlestick patterns and momentum divergence at current levels. A confirmed third wave initiation could target multiple support levels below, offering favorable risk-reward setups for CAD bulls.