EUR/CAD gapped over 1,500 points on yesterdays open due to Greek news released over the weekend of a referendum scheduled for July 5th, with many investors expecting bailout proposals to be rejected. EUR/CAD quickly recovered any losses and closed the day higher than previous three candles creating a text book bullish engulfing pattern.
Prices overall rejected and bounced off key monthly/weekly support levels @ 1.35114 (which was the initial target of my previous analysis) and closed above the 61.8% Weekly Fib level (found @1.38700 area) indicating a breakout to the upside ahead.
NOTE: Although a very prominent bullish engulfing pattern found, expect large swings (long tailed candlesticks) to occur over the course of the next couple of weeks.
CONCLUSION: BULLISH BIAS
BULL INDICATORS
1. Prominent Bullish Engulfing Candlestick (engulfs prior three candles) 2. Inverted Head & Shoulders pattern still intact (price retraced upon reaching shoulder) 3. Price closed above 61.8% Weekly Fib level
BEAR INDICATORS
1. Price is currently ranging (between 1.40400 - 1.35600 area) and has failed to close above 50% Weekly Fib level 2. Price has failed to close above Weekly/Monthly trend line (Resistance)
TARGETS
Target 1 - 1.41762 Target 2 - 1.44733
STOPS
Stop Loss - 1.37300 area (Neckline of head and shoulder pattern)