Daily Price Action
Shares

EURCAD Sets Up for Next Week Following 1.4970 Retest

Shares

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.

The EURCAD broke a significant level this week. On Tuesday I shared a chart that showed how sellers were on the verge of closing the pair below the head and shoulders neckline support.

At the time the pair was trading at 1.4895 and hadn’t yet closed the day below the 1.4970 level. But instead of attempting a late session rally, buyers threw in the towel and allowed the pair to drop even further into Tuesday’s close.

The result was a 1.4809 print which left the EURCAD well below the former support area at 1.4970. It also confirmed what we had long suspected to be a head and shoulders reversal.

But it hasn’t been smooth sailing for sellers since Tuesday’s breakdown. The 48 hours between Wednesday and Thursday erased all of Tuesday’s losses, and Friday’s session even pierced 1.4970 before reaching a high of 1.4998.

However, the latest round of figures out of Canada have helped lift the Canadian dollar so far today. The push higher by the dollar sent the EURCAD lower by more than 70 pips in less than five minutes.

For now, the pair is trading back below 1.4920 on a 4-hour closing basis. If sellers can keep prices below this area into today’s close, we should see the bearish momentum continue early next week.

You’ll also notice that today is carving a bearish engulfing range. While it may not be at a significant swing high, the pattern is developing on the back of a retest of support turned resistance at 1.4970.

I do want to be clear though. There is no confirmation until the day closes at 5 pm EST. The EURCAD can be a volatile pair at times. Look no further than the 70 pip drop a couple of hours ago.

So, while things do look promising for sellers now, that can change in an instant. That’s okay though as entering on a Friday isn’t advisable regardless of how favorable the price action appears at the time.

As such, it would be prudent to give the market some time to digest the earlier Canada CPI figures. Provided today closes back below the 1.4920 area, Monday may present an opportunity to get short.

I still have my short position from late June at 1.5580 which I announced in the member’s area at the time. I’ve since added at 1.5300, the retest of 1.5150 resistance as well as yesterday’s 1.4970 print.

Key support below 1.4920 comes in at 1.4740 followed by 1.4500. The objective for the head and shoulders pattern comes in quite a bit lower than that. At the moment, the 2016 lows near 1.3800 appear to be a prime candidate for the measured objective.

Want to Learn Step-By-Step How I Swing Trade the Forex Market?

Click Here to Register for the Free Webinar!

EURCAD daily time frame

Leave a Comment:

21 comments
andrea says

hi Justin
thanks so much for your lessons.
For this pair I’d like to ask you a comment about the weekly candle that looks a bullish pin bar right now

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Kachi says

Everything on spot. You are the man.

Reply
alieu says

S nice

Reply
Mfundo says

Surely I will be part of your members area as soon as my savings reach my target. You the only coach I’ve trusted with my last pennies. Thank you for everything.

Reply
    Justin Bennett says

    You’re welcome. See you in the member’s area.

    Reply
Farid says

Dear Mr. Justin
You are really a good trader and a analyst

Reply
    Justin Bennett says

    Thanks.

    Reply
Thabiso says

Which broker/s do you recommend for someone who wants to start? How would I go about?

Reply
Bilal says

Hi justin i have learned alot from and my trading skills enhanced by reading your commentary and articles.

I have a question what things must be considered before adding another position?

Reply
    Justin Bennett says

    Glad to hear that.

    This lesson explains everything: http://bit.ly/2nOzr2Z

    Reply
Pierre Mifsud says

Brilliant analysis as usual……All I can add is that the harmonic reversal can be as strong as 1.3650. As a prove of the strength of the CAD, in 3 months time CADJPY is clearly eyeing a range between 93-100 on both the weekly and the monthly chart as from the ascending 2016 lows of trend line support

Reply
    Justin Bennett says

    Cheers, Pierre.

    Reply
derrick says

thats good tho i wanted to go short on that pair today but i cant following yo idea that its not prudent to do so on friday

Reply
Nguyen says

Thank you

Reply
Joe says

You are more than good. The way you explain things you leave no room for questions.

Reply
Max says

Thanx you Justin❤❤

Reply
ahsan says

what about EURCAD? as 150 up what do you think now?

Reply
Diana says

I removed the EMA’s from my chart on this one – the markets have not been respecting them all week. Currencies have been flying right through them. So much going on this week.

Reply
Edet says

Dear Justin
Am new to this, just beginning. I thank you for choosing to make a difference in people’s lives. You sure know how to communicate your thoughts. I will gladly follow your lead and instructions.

Weldone!

Edet

Reply
Add Your Reply