It’s no secret that EURCAD is well off its year-to-date high. In fact, even after last week’s rally, the euro cross is off its March high by more than 1,000 pips.
However, the pair has actually been trending higher since the 2012 low.
It isn’t the cleanest rally, and EURCAD can be volatile at times, but it’s a clear uptrend nonetheless.
Now, there’s no telling whether the selloff earlier this year was the last gasp from buyers.
But we’ve seen this before from EURCAD. Just look at the monthly chart above.
One month it looks as though the pair is ready to roll over. And the next bulls are extending the price by another 500 pips or more.
For the past several months, EURCAD has carved a pattern that could suggest another push higher.
You probably know I’m a big fan of channels and wedge patterns. They’re incredibly versatile and offer precise entry points if you play your cards right.
Furthermore, they make it easy to determine a final target.
In the case of either a channel or a wedge, the final target is almost always the inception point of the structure.
More on that in a moment.
A study of the recent EURCAD price action shows what could be a falling wedge. Resistance extends from the June swing high while support began in late May.
I say “could be” a falling wedge because we don’t yet have a confirmed break. For that, buyers need to secure a daily close above wedge resistance.
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At the moment, that resistance level is up near 1.5140. That could change depending on how long it takes EURCAD to climb another 70 pips.
So until EURCAD bulls close the pair above resistance, there is no opportunity here in my opinion.
With that out of the way, let’s talk targets.
If buyers can get the job done, the first target would be the September highs at 1.5320. You can see how the level has served as a pivot since early June.
Now, remember what I said about the final target?
For a wedge like this, the final target would be the pattern’s inception point. That would equal a move to 1.5580 or about 440 pips above the wedge resistance marked below.
That leaves the market with plenty of room to run.
I’ll be adding this one to my watchlist. I will also provide updates as things unfold, but step one is a move to and close above the 1.5140 resistance area.
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