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EURCAD Plunges Below Multi-Year Channel Support

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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 style charts I use on this website.

Last Thursday I released commentary titled EURCAD Fifteen-Month Uptrend at Risk Below 1.5200. That price marked ascending channel support that extends from the 2017 low.

Although the May 10 session broke below support on an intraday basis, sellers were unable to close the session below the 1.5200 handle.

As such, we were left waiting. Sunday’s forecast reinforced the idea that the pair was vulnerable, but that a breakdown remained elusive.

Fast forward to today, and we can see that the EURCAD has taken out last week’s low at 1.5149. In fact, the pair is currently trading at levels last seen on January 17.

However, just like last Thursday, the key is a daily close below channel support, which is now closer to 1.5220/50. While sellers are undoubtedly in control at the moment, we can’t label this as a valid breakdown until a session close below 1.5220.

Remember, I use New York close charts so that each 24-hour session closes at 5 pm EST. You can go here to get access to the same charts I use.

There’s also another consideration with regard to this EURCAD decline. Since March 20, the Euro cross has carved a descending channel. The pair is testing support at 1.5080 as I type this.

Now, that does not mean that this is a buying opportunity. Far from it, in fact.

It simply tells me that we could see the EURCAD retrace back into the 1.5220/50 area before the next leg lower commences. That is if buyers can produce a bounce from descending channel support at 1.5080.

Otherwise, this smaller channel may not have much significance. Key horizontal support comes in at 1.5000 with a daily close below that targeting the 1.4730/40 area.

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EURCAD daily time frame

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14 comments
Gyanendra says

Well…

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Khalil says

Yes, you mean if the price doens’t go up it will go down.. great! You don’t spend so much word… just say: it will go up or down… that’s it

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    JB says

    Khalil, yes the price will go up or down, that is true but our ability to read the charts and watch out for our planned market catalysts are what we look for i.e pin bars, engulfing candles etc….. 🙂

    Reply
      Justin Bennett says

      You got it!

      Reply
JB says

This potential set up advice are useful – I have several potential set ups charted now, highlighted from your feedback. I am only 3 months in Forex, I joined your community today and feel hopeful that this additional trading will help my trading as my focus has developed more to the daily charts.

Reply
    Justin Bennett says

    Welcome to the group! Glad to have you. 🙂

    Reply
      Sly says

      JUstin Bennett ,

      I have been following your for sometimes you are really very good IM trying to learn from your channel trading it is very good

      Reply
        Justin Bennett says

        Pleased to hear that! Channels have become my go-to pattern. They’re effective, versatile and occur more frequently than you may think. In fact, you could develop a plan to trade nothing but channels and do quite well…just some food for thought. 😉

        Reply
James nduati Gichuru says

Good

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James nduati gichuru says

Show me the Way

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Reuben says

Nice anaysis

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Ocharive John says

Good day Justin it’s been great following you and learning and at the seems time practicing but what do you mean by channels or what are channels?

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Tendayi says

Hi Justin…now that as we speak the EUR/CAD is up to test that multiyear channel ,if a retest happens at that channel support and validates the short idea how do we set a profit target from such a big channel…im suspecting its gonna be a good move but im not sure how to handle it…thanx

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