From Investor to Scalper – series of studies created in cooperation with broker BDSwiss, in which we take a financial instrument and the analysis includes a detailed look at the value from the monthly chart and ending with 5/15 minutes.
EURCAD since the very beginning of trading history moves in consolidation within which for 25 years is forming a downward wedge. Due to emergence of a strong bullish response, at the beginning of last year market rejected the upper limit of the pattern. Since then we are seeing declines, which from a technical point of view could reach even area around 1.2000.
Looking on the weekly chart we see that in December 2015 market beat and then re-tested rejected (as resistance) extremely important level of 1.4150 which could be recognized as neck line of head & shoulders pattern. Beating last year’s lows could pave the way for further declines, even around the level of 1.3030 and if we would take into account the H&S and its range, declines could reach up to around the level 1.2170.
Due to emergence of bearish response around the level of 1.4280 last Friday, the market moves down. As a result of these declines we beat local support area, which is now re-tested and rejecting from the bottom (as resistance). If the declines will continue in the near future we expect to re-test the lows of last year’s level of around 1.3840.
On M15 chart we can see that as a result of today’s declines we have already broken upward trend line and now bears are breaking local support at 1.3965.
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