Eurcad At Crossroads

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Eurcad At Crossroads

Eur/Cad At Crossroads, Awaits A Breakout

EUR/CAD is at a potential crossroads as two different scenarios are awaiting the cross. The first scenario is based on the fact that EUR/CAD is trending higher and has jumped out of a consolidation pattern. Based on this, EUR/CAD could move higher and reach the target for this pattern.

Eur/Cad Faces Double Top Pattern

The second scenario is that the recent breakout of EUR/CAD is false. If that's the case, EUR/CAD has likely made a double top with a bearish pattern. This suggests that the EUR/CAD will move lower and reach the measured target of the double top.

If the EUR/CAD breaks above the level of 1.5172, which is the 1st November high, that would confirm the scenario #1. This will lead to more uptrend with the first target around 1.5228. Next up would be 1.5312 which is also a key bullish target and also aligns with the 61.8% fib level.

However, if the EUR/CAD closes below the 1.5101 level, it will confirm that the double top (bearish pattern) was real. In that case, a move towards the 1.5051 will be the most probable cause. Below that, the next bearish target for the EUR/CAD will be 1.5000.

Given the authenticity of both patterns, it seems that the chances of scenario#2 are higher. After all, the volume in the DT's right shoulder was lower as compared to the left. That's a sign that the bearish pattern is real and could mean a downside for the EUR/CAD.

Either way, caution is needed as there is still no clear trend for the EUR/CAD. In the short term, the EUR/CAD appears to be trending higher, but that could also be a trap for the EUR bulls.

After all, a double top is also forming on the EUR/CAD chart, which is not a good sign for the EUR bulls. However, that gives hope to the CAD bulls as they could target the immediate bearish level.

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