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EURCAD: Buy, Sell, or Do Nothing?

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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.

Many of you have been asking about the EURCAD. I haven’t mentioned it too much since the head and shoulders pattern failed, mostly because there hasn’t been a whole lot to do.

However, I wanted to take a few minutes to discuss the retest of 1.5160 as resistance. I wrote about it on August 27th and as you can see the level has held on a daily closing basis (New York 5 pm EST) ever since.

Friday’s session even carved a long upper wick, suggesting an influx of selling pressure above the 1.5160 area. The lower wick of Friday’s candle is too long for me to consider it a pin bar.

What’s more concerning from a bearish standpoint though is how sellers have failed to push prices lower. Yes, they have defended 1.5160 as resistance so far, but buyers have been there to soak up every offer.

Today we can see how the EURCAD is once again challenging this area. The session close at 5 pm EST is still hours away, so the level hasn’t failed as resistance just yet.

That said, this is not a selling opportunity in my opinion. There’s been too much demand below 1.5160 and Friday’s long upper wick developed after several days of sideways movement.

Everything you learn about the Forex market boils down to supply vs. demand. No matter if you trade the 1-minute chart or the daily time frame, and regardless of whether you use indicators or not. Supply and demand are what move markets, period.

When I look at the EURCAD, I see demand outweighing supply at the moment. Of course, that can change in an instant, but for now, I see no reason to go short.

If the pair closes above 1.5160 on a daily closing basis, there would be more reason to buy than sell. Such a close would expose the next key level at 1.5315. It’s one that generated a sell signal for us at the end of July.

Keep in mind that there is also a trend line that extends from the year to date high at 1.6151. Whether or not market participants pay attention to it is unknown at this point, but it is worth keeping an eye on moving forward.

In summary, this is a wash for me at the moment. Not worth buying and not worth selling. If you’re interested in the Canadian dollar, you may find the price action on the USDCAD more appealing.

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EURCAD daily time frame

Leave a Comment:

15 comments
Metin says

hi, I’m buying.

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Emuobo says

Had to close a short trade in loss. Now I’m reminded why you advice to wait till close on Monday.

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Teboho Africa Dintwe says

I see an opportunity for buysing sir, I see an engulfing after the cross of the two MAs

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majid says

i beleive price has to move downward i mean has to bounce to go long until 1.61 500 or higher this is a good chance to entre set and forget rule that’s my thoughts if i am wronge justin can correct me thanks.

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Pierre Mifsud says

I agree with you quite consolidating at the moment. However from the weekly chart a descending triangle has formed and the EURCAD today has been very close at breaking the resistance trendline signifying more buying pressure…..I see that the EURCAD will follow in the footsteps of EURAUD ultimately as they behave quite similarly…Agreed?

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    steve says

    Based on market momentum I think a sell from 1.52800 if we get a sell signal.

    Reply
    Pierre Mifsud says

    Trendline of descending triangle resistance as from WEEKLY broken in EURCAD…..Should BUY….target 1.54513

    Any comments welcomed

    Reply
      Pierre Mifsud says

      Stoploss at 1.5147

      Reply
Jenerali says

you’re right, the pair doesn’t offer high probability set ups, and there’s just to much noise in recent trading days at 1.5160 levels

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Ayotunde says

Justin could you please suggest some exotic pairs for me to trade. I want to become a profitable and consistent trader trading only two pairs

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Philippe says

I am selling at 1.5250

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andre says

Hi Justin

Would you perhaps add comments on the basic fundamentals of a currency pair you are following? In addition to your technical analysis?

From Donald Trump to Trade Wars to Emerging Market jitters, Ive picked up some really wild swings on some currency pairs over the last few weeks. Unless its more to do with the recent Summer Holiday months?

Thanks for your great website

Andre Dix

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    Justin Bennett says

    You’re welcome. I don’t use fundamentals, only technicals.

    Reply
Trond Midtun says

I am happy that i close my eur/cad sell in loss, and now i sell gbp/usd and buy usd/cad. Already take back my loss. I need to be patience and see how this will go. Thanks to Justin who always do a great job 🙂

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