EUR/CAD 1MN Chart: Symmetrical Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The monthly chart shows a symmetrical triangle that EUR/CAD has developed over the last eight years. Because an explicit trend has not been established before the triangle formation, an upward breakout is as likely as a downward one and it can be expected that one will occur rather sooner than later. What shifts our expectations more towards a bullish outburst, however, is the combined pressure of the 100 and 55-month SMAs pushing from below the current exchange rate. In case the pair breaks the top trend-line at 1.5020, the way towards 1.5284 will be opened to test the upper Bollinger Band strengthened by 2014 highs. If the pair dips underneath the 1.4149 level, 1.4029 will limit the losses. A bullish breakout is also supported by a pessimistic trader sentiment (63% of outstanding positions are short) which suggests that a bear market would not be sustainable.
© Dukascopy Bank SA
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