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The EURCAD cracked a massive support level yesterday.
But this wasn’t a surprise.
I wrote about EURCAD back on May 21st. In that commentary, I mentioned how a daily close below this trend line would open up downside targets.
The lower highs since last December hinted at an imminent breakdown.
In all honesty, though, EURCAD held onto this trend line longer than I thought it might, especially considering how heavy the pair looked in May.
But I don’t mind waiting.
As long as the pair stays below this 1.5000 region, I favor selling EURCAD.
Key support comes in at the 2018 low of 1.4750 with a daily close below that exposing the 2017 double bottom at 1.4470.
Keep in mind that 1.4470 is also very near the inception point of this trend line.
I suspect this area will serve as a magnet for EURCAD which gives us 500 pips to work with when measuring from 1.5000.
The question now is, will we get a retest of the 1.5000 area as new resistance?
It’s always a toss-up, but given the minor support around 1.4900 and the distance between yesterday’s close and the 10 and 20 EMAs, I prefer waiting for a bounce.
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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