While EUR/CAD tested a low of 1.3025 on April 17 following a sharp upward correction, it formed a bullish divergence on the RSI oscillator. This could be an indication that the correction is not over yet and pair could be reaching new highs. But, it has to break above already formed resistance near 1.3750.
After the first corrective wave up, the pair retraced back to the 38.2% Fibonacci that is applied to a low of 1.3025 (back on April 17) and a high of 1.3807 (back on April 17). On the daily chart, EUR/CAD rejected S1 (closed above). At the same time, it has nearly tested 50% retracement level marked S2. Finally, the pair formed a doji candle and just broke above its high suggesting the price is ready to rise.
Consider buying EUR/CAD near a high of the doji candle that is 1.3567. The pair is expected to form a triple top near the level of 1.3750 where strong resistance can be observed. Only a break below S2 (1.3416) would be able to push the price lower to S3 (1.3323).
Support: 1.3567, 1.3507,
Resistance: 1.3623, 1.3751,
The material has been provided by InstaForex Company – www.instaforex.com