We've got a bit of a strange one here today...
EUR/CAD is shaping up for a near textbook bullish divergence pattern AND it's sitting on a long established S/R zone (defined by my S/R algo - see the Related Ideas).
Why is that strange? Well, basically because EUR is so weak at the moment. It's just broken multi-year lows, so unless that's a false breakout (which is a possibility, I guess), EUR should head lower. Generally I like to trade a strong/weak pair, and trading weak/weak pairs can result in some indecisive action (see basically all of 2019 for EUR/CAD).
Anyway, this is a textbook trade for me, so I'll be taking it - BUT, as always I'll be waiting for confirmation. We've already had a perfect touch (a few days ago) of the S/R zone just below current price, so all that's left is to wait for price confirmation. There's lots of things you can look for here, but in a nutshell you just want to see bullish strength.
I'll keep an eye on this one over the coming days and see how it develops.
Profit targets are a bit hard to define because EUR/CAD has been stuck in a sideways movement for months. So I'll be going with the next highest S/R zone at 1.53793 (always remember to leave a pretty wide buffer around these zones). That would be a 700+ pip movement, but would/will likely take months to play out. If that works for you, great. If not, potentially look at riding the zig zag upwards.
All the best!
DD
EUR/CAD is shaping up for a near textbook bullish divergence pattern AND it's sitting on a long established S/R zone (defined by my S/R algo - see the Related Ideas).
Why is that strange? Well, basically because EUR is so weak at the moment. It's just broken multi-year lows, so unless that's a false breakout (which is a possibility, I guess), EUR should head lower. Generally I like to trade a strong/weak pair, and trading weak/weak pairs can result in some indecisive action (see basically all of 2019 for EUR/CAD).
Anyway, this is a textbook trade for me, so I'll be taking it - BUT, as always I'll be waiting for confirmation. We've already had a perfect touch (a few days ago) of the S/R zone just below current price, so all that's left is to wait for price confirmation. There's lots of things you can look for here, but in a nutshell you just want to see bullish strength.
I'll keep an eye on this one over the coming days and see how it develops.
Profit targets are a bit hard to define because EUR/CAD has been stuck in a sideways movement for months. So I'll be going with the next highest S/R zone at 1.53793 (always remember to leave a pretty wide buffer around these zones). That would be a 700+ pip movement, but would/will likely take months to play out. If that works for you, great. If not, potentially look at riding the zig zag upwards.
All the best!
DD
Comment:
Well, this one is working out well so far. The position is currently up +250 pips. I'm holding this for the long-term, as I think this is a true trend reversal. For those wondering, first target level is 2019 highs (around 300 pips from now), and then 2018 highs (around 720 pips from now).
Bear in mind the market will zig zag all the way there (if it reaches there - I don't have a crystal ball) so pick your entry points with care.
Bear in mind the market will zig zag all the way there (if it reaches there - I don't have a crystal ball) so pick your entry points with care.
Comment:
If you're in this trade, then here's the current support zone 1.4860 (ish).
Also see my new post about the long-term structure of EUR/CAD and some observations: