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EURCAD bulls were on the move again late Friday following Wednesday’s breakout.
I first mentioned this falling wedge on November 19th. At the time, EURCAD was trading well below key resistance.
However, the descending price action since June hinted at a topside break.
I went on to discuss this same formation on November 30th and again on December 4th.
That commentary on the 4th is where I mentioned a clue.
Here’s what I wrote:
If EURCAD marches higher this week and retests resistance, there’s a good chance we’ll see a break higher.
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Repeated retests of a level often foreshadow a breakout. EURCAD would not be an exception to that rule.
The EURCAD finished that same day 60 pips higher. And by December 5th, the pair had cleared wedge resistance by nearly 40 pips.
That was the breakout I had been waiting for since the 19th of November.
Buyers didn’t waste any time taking EURCAD higher. Thursday’s session reached a session high just below our first resistance level at 1.5320.
It amounted to an impressive 160 pip single session rally.
However, the last 24 hours is what I want to discuss.
Following Thursday’s retest of the area just below 1.5320, the euro cross gave up more than 200 pips.
That would be a surprise if it were any other pair.
The Canadian dollar crosses can cover a lot of ground in a hurry. EURCAD is no exception.
Now, notice where Friday’s session caught a bid. That low of 1.5100 was the retest of former wedge resistance as new support.
I even called attention to this in the member’s area.
Here’s the comment I made:
The fact that buyers not only held on but closed EURCAD off its session low by 80 pips is a relatively bullish sign.
As long as this new support area between 1.5100 and 1.5130 remains intact next week, all eyes will be on that 1.5320 region.
But as I mentioned last month, there’s a decent chance that EURCAD can reach the June high at 1.5580 before this is over.
That’s the inception point of this falling wedge that began in June.
Enjoy your weekend. More ideas and analysis to come Sunday.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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