Daily Price Action

EURCAD: New Terminal Pattern to Offer Clues


I first mentioned the EURCAD wedge pattern on November 19th.

At the time, we didn’t have the short-term trend line support you see in the chart below. That’s a new development as of yesterday.

But even without that lower level at 1.4950, the descending nature of the price action since June had a bullish tilt to it.

I was by no means bullish EURCAD though. And that hasn’t changed.

It’s still going to take a daily close above the 1.5130 resistance area to convince me buyers are ready to push prices higher.

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Until then, this consolidation period will continue.

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This new short-term trend line does give us a fresh perspective though.

If buyers fail to take out 1.5130 resistance, a daily close below trend line support near 1.4950 would be bearish in my opinion.

It would also expose recent lows including 1.4850 and perhaps 1.4750.

Now, if EURCAD marches higher this week and retests resistance, there’s a good chance we’ll see a break higher.

Repeated retests of a level often foreshadow a breakout. EURCAD would not be an exception to that rule.

So far, we’ve already seen two retests of resistance in the last two weeks. A third one this week would be slightly bullish in my opinion.

It’s also no secret that I’m not overly fond of buying the Canadian dollar.

I wrote about the CADJPY ascending channel on the 20th of November.

Buyers are keeping their heads above water for now, but overall the price action since March looks relatively bearish.

As for EURCAD, a daily close above the 1.5130 resistance area would open the door to 1.5320. A close above that would expose the June high at 1.5580.

Alternatively, a daily close below short-term trend line support near 1.4950 would pave the way for a move to 1.4850 and perhaps 1.4750.

Similar to EURUSD and GBPUSD, this one could go either way. 

As such, it’s best to prepare for both outcomes so you can react accordingly when the time comes.

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EURCAD terminal pattern on the daily chart

About the Author Justin Bennett

Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...

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  • Uzoma Nnamdi says:

    Thanks sir for always updating us on what next

  • Diogo says:

    I was waiting for the retest of 1.513 to short it, but your commentary made me uncertain about what I should do. Thanks for the input.

  • Felix says:

    Can I be able to trade on my own if registered?

  • Steve Ochieng says:

    Great Justin

  • Jenerali says:

    thanks for the update justin

  • Pierre Mifsud says:

    I personally see potential harmonic strength to come in the EURO……by looking at EURAUD daily pattern I saw a clear strong bullish divergence which has started, which could rally the EURAUD to the 1.6350 handle once again

    • Pierre Mifsud says:

      this could have potential effects on all the other EUR pairs as well

  • Frank Shabani Mmbaga says:

    How about GBPNZD? What is the direction for this pair? I short this pair since tuesday

    • I don’t know. This post is about EURCAD…

    • Pierre Mifsud says:

      Careful……there is a bullish divergence on this pair….very likely that the market direction is changing….very likely that the pair will rally up to the first daily resistance at 1.89

      • The descending price action says as much. Hence the reason I’ve been leaning toward a bullish break since my first comments on November 19.

  • bill1985 says:

    so are you buying the daily close on this pair?

  • Morero says:

    I see EUR they want to take power Mr Justin I see that the candlestick just pass that resistance of 1.5100/30 meaning there’s a breakout and again yesterday market closed as engulfing bullish meaning this candlestick is a confirmation of buy….

  • OGBORO preciouslife says:

    God bless

  • Joseph says:

    Hello Justin. Thank you for your analysis. The buyers managed to break through the chanel resistance. What would be the best entry for this pair?

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