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EURCAD Rejected by Confluence of Resistance at 1.5150

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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.

On Sunday I wrote about the EURCAD. More specifically, I discussed how the area between 1.4960 and 1.5000 would likely attract a bid while the 1.5120/50 region would serve as resistance.

It didn’t take long for the 1.5000 handle to put the brakes on last week’s decline. In fact, the Euro cross stopped just shy of the level with Tuesday’s session carving a low of 1.5009.

Buyers spent the next 24 hours taking the pair 150 pips higher and even retested 1.5150 as new resistance before the day was over.

However, I held off on adding to my short position (initial entry was in late June at 1.5580) due to the aggressiveness of Tuesday’s climb. The odds of a second push higher seemed likely given the 150 pip single session rally.

Yesterday’s (Wednesday) candle is what I was waiting for. Notice how the EURCAD rallied above the confluence of resistance at 1.5120/50 intraday but failed to close the pair above it before the New York close at 5 pm EST.

Remember, I use New York close charts which are critical if you’re going to trade an end-of-day style such as this. You can get access to the same charts I use here.

Although the lower wick of yesterday’s candle is a bit long to call it a bearish rejection candle, the long upper wick tells the story. That said, there is a decent chance we could see buyers take another run at 1.5130 or even 1.5150 before this is over.

Also keep in mind that key support isn’t far away at 1.5000. Unless you’re already short from the July 31st reaction to 1.5315 or higher, securing a favorable risk to reward ratio may be a challenge here. As always, it’s your decision.

The only thing I can say with certainty is that the confluence of resistance at 1.5120/50 is holding on a daily closing basis. Whether that continues to be the case is unknown, but as long as it holds, the EURCAD is vulnerable and 1.5000 remains exposed.

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EURCAD range on the daily time frame

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11 comments
Pierre Mifsud says

Thanks for the comment…..I remain bearish here as the weekly and monthly timeframes based on wave harmonics show that we have a type II reversal exposing even the 1.41 handle

Reply
    Justin Bennett says

    Not sure about wave harmonics, but the head and shoulders pattern (similar to GBPCAD) says it all. We’ve been discussing it for some time in the member’s area.

    Reply
      Emeka says

      Even NZDCAD Justin i entered 10 pips below the pinbar on daily tf good for 88 pips

      Reply
    Pierre Mifsud says

    Very true indeed! The EUR trades very similar to the GBP, only that the GBP is weaker…..and that the EUR is holding more for now….So I think that the GBPCAD is the fast-forward of the EURCAD where I will not be surprised if the EURCAD will plummet for another 800 pips. In fact the EURCAD has been descending for the last 6 months

    Reply
bowale says

How about the audcad please?. Same situation seems to hold?

Reply
    Oludare says

    Yes you are right looking for opportunity to short again

    Reply
Oludare says

Justin you are my forex hero I short this pair on Monday and the bulls almost want me to change my mind but I held on because I saw something like head and shoulders on this pair is that what you are also seeing also

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Bobby says

It happened guys.. I blew another account.. anybody generous enough to give me USD100?? Need another account.

Reply
    Roy says

    You should go back to demo account and read all topics on this site.

    When you make consistent profit then think about opening a live account again. Just my advice to you.

    Reply
Nelson says

This came right in time. First message i saw when i woke. I have been short on EurCad at 1.5173. I watched the pair closely during yesterdays rally but settled back at 1.5116 below resistance pointed out by Mr Justin. What a wonderful man you are! Thank you!

Reply
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