Several Bullish Signs Point to an Exhaustion of Bearish Movement
Don’t get us wrong. We do agree that EURCAD is moving in a long-term bearish trend, with price making lower lows after breaking its previous support levels. However, we do see that there are several bullish signs pointing to a possible exhaustion of this bearish segment. EURCAD is considerably a stable pair and follows clear periods of trending and consolidation. Recently, the price broke out of its falling wedge pattern, with price reaching a previous high at 1.3740~1.3760 area. This movement has created a neckline where a breakout from this area could indicate a possible reversal. In addition, we can see a clear bullish divergence which is formed in RSI, signaling a potential reversal which could occur in the near future. Therefore, we have put our sell plans on hold for this pair and will wait to sell at higher levels. Currently, we are looking for short-term buy entries.
Entry Criteria:
We can see that a neckline area is established after price breaking out of the falling wedge pattern. From here, the price could drop again to creat a third shoulder and potentially form an inverse head and shoulder pattern, which is commonly formed after a price breaking out of a falling wedge pattern. We will then observe whether the price could break the neckline area. After a clear breakout, we will wait for the retracement and enter buy positions after retest of the neckline. The buy target is the previous support of 1.4100 levels. Once the price reaches that area, we will then switch to sell entries and target the 2022 yearly low.
Entry Criteria:
We can see that a neckline area is established after price breaking out of the falling wedge pattern. From here, the price could drop again to creat a third shoulder and potentially form an inverse head and shoulder pattern, which is commonly formed after a price breaking out of a falling wedge pattern. We will then observe whether the price could break the neckline area. After a clear breakout, we will wait for the retracement and enter buy positions after retest of the neckline. The buy target is the previous support of 1.4100 levels. Once the price reaches that area, we will then switch to sell entries and target the 2022 yearly low.
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