I was asked a detailed opinion on a forum so I decided to report it here.
The question was about going Short on EURCAD @1.4227 after the bearish pin-bar where the pair closed yesterday.
Looking at lower timeframes I had marked one at 1.4251 which is currently where the price is being contained after dropping yesterday afternoon (the price started to move in the meanwhile but still...), and a tentative breakout got rejected 2 hours ago (between 8 and 9 UK Time).
A conservative SL @1.431 seems to clear the high the price made on the 23rd, which can be fine.
The bearish pin bar is well spotted; however, I fail to see a downwards trend here.
The thing that might go in favour of this trade is that the price is moving in a nice wave form in the last year or so, then dropped and then took the wave movement again. This could be the top of yet another wave (triggered by the bearish pin-bar).
So far not too bad on D1 timeframe.
The weekly, on the contrary, does not tell me much; if anything, I see a general trend to the upside with former level of support/resistance around 1.4212 (+-20 pips) which would make me think a bit (see the Magenta line in the screenshot) .
This looks like a "risky" reversal for the ones who like to take these kinds of trades, and maybe see to reach the bottom of the trendline, but I cannot see strong indications to go short at the moment.
Cheers
The question was about going Short on EURCAD @1.4227 after the bearish pin-bar where the pair closed yesterday.
Looking at lower timeframes I had marked one at 1.4251 which is currently where the price is being contained after dropping yesterday afternoon (the price started to move in the meanwhile but still...), and a tentative breakout got rejected 2 hours ago (between 8 and 9 UK Time).
A conservative SL @1.431 seems to clear the high the price made on the 23rd, which can be fine.
The bearish pin bar is well spotted; however, I fail to see a downwards trend here.
The thing that might go in favour of this trade is that the price is moving in a nice wave form in the last year or so, then dropped and then took the wave movement again. This could be the top of yet another wave (triggered by the bearish pin-bar).
So far not too bad on D1 timeframe.
The weekly, on the contrary, does not tell me much; if anything, I see a general trend to the upside with former level of support/resistance around 1.4212 (+-20 pips) which would make me think a bit (see the Magenta line in the screenshot) .
This looks like a "risky" reversal for the ones who like to take these kinds of trades, and maybe see to reach the bottom of the trendline, but I cannot see strong indications to go short at the moment.
Cheers