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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
Click here to get access to the same charts I use.
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On Sunday I wrote about the EURCAD. More specifically, I discussed how the area between 1.4960 and 1.5000 would likely attract a bid while the 1.5120/50 region would serve as resistance.
It didn’t take long for the 1.5000 handle to put the brakes on last week’s decline. In fact, the Euro cross stopped just shy of the level with Tuesday’s session carving a low of 1.5009.
Buyers spent the next 24 hours taking the pair 150 pips higher and even retested 1.5150 as new resistance before the day was over.
However, I held off on adding to my short position (initial entry was in late June at 1.5580) due to the aggressiveness of Tuesday’s climb. The odds of a second push higher seemed likely given the 150 pip single session rally.
Yesterday’s (Wednesday) candle is what I was waiting for. Notice how the EURCAD rallied above the confluence of resistance at 1.5120/50 intraday but failed to close the pair above it before the New York close at 5 pm EST.
Remember, I use New York close charts which are critical if you’re going to trade an end-of-day style such as this. You can get access to the same charts I use here.
Although the lower wick of yesterday’s candle is a bit long to call it a bearish rejection candle, the long upper wick tells the story. That said, there is a decent chance we could see buyers take another run at 1.5130 or even 1.5150 before this is over.
Also keep in mind that key support isn’t far away at 1.5000. Unless you’re already short from the July 31st reaction to 1.5315 or higher, securing a favorable risk to reward ratio may be a challenge here. As always, it’s your decision.
The only thing I can say with certainty is that the confluence of resistance at 1.5120/50 is holding on a daily closing basis. Whether that continues to be the case is unknown, but as long as it holds, the EURCAD is vulnerable and 1.5000 remains exposed.
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