Exactly one week ago we discussed how the EURCAD bulls were tiring following a 430 pip bearish engulfing week. When I released that commentary on April 6th, the pair had already broken channel support on an intraday basis.
While writing that post, I took a short position at 1.4321, which I shared with members at the time of the entry. I also added to that position on the April 11th retest of 1.4170, a level I mentioned in last week’s post.
For a more detailed write up of the EURCAD including the March retest of a 2,000 pip head and shoulders neckline, see this post.
Another level I was keeping a close eye on is 1.4095. The area served as key resistance in late January and early February as well as a brief period on March 1st and 2nd. It was also the technical catalyst for yesterday’s rebound.
A quick Fibonacci study shows that 1.4095 is the 61.8% retracement when measuring from the current 2017 low at 1.3783 to the high at 1.4598.
While sellers have already managed a 4-hour close below the area, I’d like to see a daily close (5 pm EST) to confirm the break. If that happens, a retest of 1.4095 as new resistance is likely given that the pair is currently 150 pips below the mean as measured by the 10 and 20 EMAs.
On the other hand, should buyers close the pair above 1.4095 before today’s close, traders can watch for selling opportunities from the 1.4170/90 area. A close above that would expose the next resistance level at 1.4260.
I’m standing aside, for now, to find out which side will be victorious at the end of today’s session. I’d like to add to my current short position, but a confirmed break of support is needed first.
Want to see how we are trading this setup? Click here to get lifetime access.