The EURCAD is at a crossroads. On the one hand, the pair has been quite bullish since February, but on the other, sellers are forcing a retest of a long-standing trend line.
The April 24th close above the trend line that extends from the December 2015 low triggered an explosive 600 pip rally that topped out in June at 1.5250. But as of Tuesday, sellers have erased those gains and are now pressuring the 1.4670 area for a fourth straight session.
Below is a “big picture” view from the weekly time frame.
Now, it’s important to keep in mind that this level is still holding as support at the time of this writing. Also, the lack of a buy signal or daily close below support leaves us on the sideline for now.
If we get a daily close below the 1.4670 area, it could set up a favorable opportunity to get short next week. It would also pave the way for a retest of 1.4470 which would close the gap from late April.
Alternatively, a bullish pin bar on the daily chart from the 1.4670 area could present an opportunity to get long. The next resistance level above the current price comes in at the May 30th low of 1.4965.
I will follow up on the EURCAD if one of the two scenarios above materializes next week.
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