Hello there Forex traders!
Today I am going to share with you 3 very interesting charts which I think have great potential.
They are: EURCAD, GBPCAD and the EURJPY!
As always, please take a look at the articles for other information regarding:
Let us first discuss the EURCAD.
The EURCAD remains an interesting currency pair due to the many patterns visible on the daily chart.
The whole story is even more fascinating due to its weekly trend line (purple). This trend line has caused lots of mess and respect in the past, and even has had an impact since the trend line broke. Four times the weekly trend line got respected by price, but by the 5th time the trend line proved to be defenceless and price was able to push through it, albeit at a very slow pace (blue numbers in screenshot).
The break proved a tough nut to crack as not only was price moving slowly through the weekly trend line, price actually hooked back to the trend line multiple times from intra-day time frames to daily candles, from a daily swing to the more recent weekly swing (dark red letters).
So the EURCAD has had multiple attempts to break and after break had multiple hook backs and bounces. What else catches our eye?
Here is the list.
We will be now summarizing the currency with the following characteristics:
1) The swing high swing low which was able to punch through and break the weekly trend line has a great and neat trend channel (dark blue lines)
3) The currency is now making lower lows and lower highs on the daily chart, making it technically speaking a down trend (orange lines). Read more here about trading without indicators
5) The currency is still trending to the upside if you connect the bigger bottoms (green lines)
6) The Oscillator is back to the 0 line which means that the minimum retracement on this currency has been completed http://www.winnersedgetrading.com/the-power-of-momentum-divergence-convergence/
CONCLUSION AND OPPORTUNITY
The conclusion is that the currency is technically in a down trend on the day chart making consecutive lower highs and lower lows. Obviously other factors are showing that the EURCAD is in a bigger up trend.
Therefore, I believe that the currency has the most opportunity when:
1) Breaking the top of the trend line / bull flag pattern (orange line) AND
2) Upon breaking the last daily high and resistance (top red line) at 1.37
The currency bounced off the 500 fib so the targets are the -0.272 target at 1.4020 and the -0.618 target at 1.4280.
How about if the currency were to move up BUT fail to break the top of the bull flag (orange lines)? Then one more leg of the bull flag could take place. This means that the currency could bounce at the top of the bull flag and correct itself to retest the current low at 1.3430 (bottom of red line) OR even correct down to the 618 Fibonacci retracement.
The GBPCAD is in a very similar situation as the EURCAD and the entire summary which was compiled for the EURCAD could be equally valid for the GBPCAD. There are some key differences and those are the following:
1) The GBPCAD has corrected a lot deeper, which makes it either a steeper down trend OR an impulsive correction
2) The currency pair has moved back all the way to the support trend line (green line)
This currency pair could be ready for a bounce off the bigger support trend line. But how do we know?
A break above the daily resistance level (dark red) would indicate that the GBPCAD is sufficiently bullish to post a higher high which the first indication that a bounce is indeed emerging. Just be careful of the down trend line (orange).
The EURJPY is a bit further in its development than the EURCAD and the GBPCAD.
The EURJPY not only has broken a trend line and hooked back to it and bounced (black trend line). BUT has already continued with its path up and has also:
1) Posted higher highs and higher lows making an uptrend
2) Respecting the major up trend line (green line)
3) Breaking out of another smaller correction / bull flag (dark red line)
The last remaining obstacle that needs to be cleared before the bulls have full control is the daily top and resistance level (red) at 131.00-131.10.
Once that is out of the way, there seems nothing that can stop this EJ from continuing to the upside except the -0.272 and -0.618 targets and the bigger top. Here are the values:
1) The smaller Fib targets (Fib on the right / 618 Fib bounce) are -0.272 at 132.35 and -0.618 at 133.92
2) The bigger -0.272 target (Fib on the left / 618 Fib bounce) is -0.272 at 137.81
3) The bigger top is at 133.81
Oh, and be careful of the green line! As long as the EJ stays above it, the upside could happen any day… but if we break that green line, a new reality might be facing us Forex traders.
Thank you, so much, for taking the time to read this article and for sharing it!!! Much appreciated.
Please leave a comment down below!
Winner’s Edge Trading, as seen on: