The formation of the inverse head and shoulders pattern for EURCAD has resulted in a reversal of the prior downtrend that reached 1.3021 and the market moved back up. Prices are above the neckline and above the 200-day moving average, which is supportive of the upside bias. Currently, prices are testing the 50% Fibonacci retracement level at 1.4298, from the 1.5583-1.3021 downleg.
The overall outlook is still bullish and EURCAD has scope to target the next Fibonacci level, the 61.8% at 1.4601, if the current support at the 50% Fibonacci (1.4298) holds. If support is broken and prices fall back, the next support lies at 1.3996 at the 38.2% Fibonacci.
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