Sophia Todorova is the host of the live trading room for the London session. She has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens. To Trade Live with Sophia Join Winners Edge Trading Premium Services.
The major currency pairs all seem stuck between major areas of resistance and support. As such, the trading opportunities are more aggressive, and require careful management. However, those that are available, if traded correctly can yield substantial profits. One pair I am looking at is the eurcad. The technical analysis is key in determining entry for this setup. This daily chart shows, at the red horizontal line, a critical area that, if breached, offers a solid trade setup to go long towards the 38.20% Fibonacci retracement level at 1.2839.
This critical level (1.2649) is an area of past support, where the market bounced earlier. Due to the fact that a past support area turns into resistance once it is broken and retested, it is important for this level to first be breached before considering long positions beyond that point. The trendline on the1hr chart below has been trending up for the past two days, but fell back when it tested 1.2649 past resistance level. It is currently being supported by its up trendline.
Trading Strategy
Watch the 1hr chart for a good, solid close above 1.2660. Look to go long on a retracement if the candle is too big. The safest place I see for stop placement is below 1.2560. Set a limit to exit for profit at 1.2800, ahead of the 38.20% fib.
If the bullish setup does not play out, watch for a break of the 1 hr trendline to consider shorting. The most immediate target for the short would be 1.2500.
I will be giving updates on twitter. Follow me there if you wish to trade this setup. You will be able to get my updates instantly, as I post them.
Thanks for reading, and please post all the questions or comments you may have.
I am still watching euraud from yesterday’s post for a re-entry: http://www.winnersedgetrading.com/trade-setup-euraud/
Other useful blogs:
Forex Crunch: Spain’s Credit Freeze Weighs on Euro
The GeekKnows- Daily commentary on eurusd
One other free trading tool I recommend is Currensee . It can be a useful tool to be able to see how other professional traders are doing.
