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EURCAD Bulls Tire Following Weekly Bearish Engulfing Pattern

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On Tuesday I mentioned that the EURCAD was likely to remain soft below the 1.4380 handle. This level is the 2011 high and has been a significant influence ever since. It’s also the 50% retracement of last week’s bearish engulfing pattern.

With this in mind, I was intent on waiting for a sell signal from the 1.4380 area. And given the relief rally so far this week, a retest of the level seemed plausible.

However, a recent development on the intraday charts suggests otherwise.

You may recall my reference to an intraday ascending channel in Tuesday’s post. I mentioned this second entry method would kick in should buyers fail to reach 1.4380 over the coming sessions.

While there is no guarantee that buyers won’t take prices higher from here, the support level of the channel I mentioned has failed. It’s best viewed on the 1-hour chart below but those who only trade the 4-hour time frame and higher could play it that way all the same.

Should sellers regain control, the next key support level comes in at Monday’s low of 1.4170. A close below that would expose the 1.4030/40 area followed by the 2016 and (current) 2017 lows near 1.3820.

Keep in mind that the next 24 hours holds key events for both currencies. At 8:30 am EST we have Canada employment figures as well as U.S. non-farm payroll and the latest unemployment rate.

The combination of these releases will no doubt trigger a spike in volatility for a pair like the EURCAD.

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EURCAD channel

Leave a Comment:

7 comments
DTz says

charts are no longer magnified when clicking on them, why?

Reply
    Justin Bennett says

    Because I had the site redesigned last year.

    Reply
Valentine says

The enlargement feature makes it easy for the charts to be seen clearly. Please have them put it back, please.

Reply
MATEYE SERATHA says

I took this one and I am swimming in profit right now.. haha I am happy I signed up to receive possible setups via email.

Reply
    Justin Bennett says

    Glad to hear it. Just keep one eye on those upcoming events.

    Reply
Gregory Dzedzy says

Great call set-up on Eur/Cad I got a nice +65 pips today!

Reply
    Justin Bennett says

    Well done, Gregory.

    Reply
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