The weekend gaps last month made a mess of the inverse head and shoulders pattern that had been forming on EURCAD since mid March. That said, the pattern thus far has stayed true to form and the pair appears to be making another attempt at a break higher.
How much higher?
Of course we can only speculate, but with well-defined resistance levels and an unfulfilled measured objective from the larger reversal pattern, we can achieve a fairly accurate projection.
Those resistance levels in question come in at 1.4212 and 1.4340 while the measured objective from the inverse head and shoulders sits at 1.4490. This level also lines up with the current 2015 high.
As with any trade setup, we need a trigger. In the case of EURCAD that trigger will be a close above the upper boundary of consolidation that has been taking place since July 10th. A look at the daily chart gives a better perspective of how this pair has been coiling over the past seven trading day, but a more accurate entry price can be found using the 4 hour chart.
Summary: Wait for a 4 hour close above wedge resistance and then watch for a buying opportunity. Key resistance comes in at 1.4212, 1.4340 with a measured objective at 1.4490.