Daily Price Action
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Don’t Count EURCAD Out Just Yet

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EURCAD has been an interesting pair to watch over the last two weeks. After losing ground last week the pair had no trouble finding buyers at the 1.3430 support level early this week.

You may remember the commentary I published on May 14th. In that commentary I called attention to the importance of this area and more importantly, what a break above it could mean for the pair.

The daily chart below shows it best. The formation that has been coming together since mid March hints at an inverse head and shoulders pattern. However only a daily close above the neckline at 1.3765 will confirm the pattern and set the stage for a move higher.

After finding buyers at 1.3430 to start the week, the market looks ready to tackle the next level of resistance at 1.3575. Of course with the Euro as unstable as it is we need to wait for the right time to buy into any bullish move from current levels.

Summary: Wait for a daily close above 1.3575 and then watch for bullish price action for a potential advance back to resistance at 1.3765. A break would confirm the reversal pattern and expose the next key level of resistance at 1.4080.

EURCAD potential inverse head and shoulders on the daily time frame

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