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Technical Analysis – EURCAD bullish after inverse head and shoulders formation

EURCAD has pushed above the daily Ichimoku cloud but found resistance at the 38.2% Fibonacci retracement at 1.3994 of the decline from 1.5583 (March 2014) to 1.3021 (April 2015). There is scope for a correction back to the neckline of the inverse head and shoulders pattern at around 1.3785.

The outlook is quite bullish because of this inverse head and shoulders chart pattern. This pattern usually indicates a reversal of the prior trend, in this case the downtrend from 15583 to 1.3021. The pattern is only completed after it breaks the neckline.

EURCAD has scope to target the 50% Fibonacci at 1.4298. There is room for further upside momentum as indicated by the RSI which is above 50 in bullish territory.



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