EURCAD Simple Analysis A La complicated Form
[2016-11-29 04:59 GMT]
Technically, EURCAD isn’t simple to trade. Fundamentally, the bearish move of euros in the coming months should force this cross to wave in parallel. I represent the daily chart where rally started in March 2015 at 1.3017.
This particular rally has had the 61% Fib line at 1.4200 supported for months, mainly after one year from establishing the rally 1.3017 – 1.6111. in other words, 61% fib line at 1.42 was a support line for the whole 2016, at least till now (end of November).
The last few days, the daily candlesticks point to an engulfing pattern and at the base of the rectangle, an indication that the flow towards the south is far from completion.
The symmetrical triangle was broken and a rectangle was developed afterwards. However, the symmetrical triangle does confirm a target at 1.3400 as shown by the blue arcs, and it targets indeed south because a rectangle was patterned after a downward move of almost 1800 pips (1.6111-1.4200). by definition, a rectangle being developed after a trend, will break up towards the continuation pattern of that trend. So south be it!
The red arcs shows the formation of head and shoulder & the neckline coincides pretty almost with the base of the rectangle.
What do we need? A weekly or monthly close below the base of the rectangle (hopefully, it does it tomorrow) so we can establish afterwards a bearish post to target 1.3400, the target of the rectangle (green arcs)that coincides with the target of the symmetrical triangle.
Signal: Sell the weekly/monthly close below rectangle base. Add at the downward sloping trendline that is reading today 1.50 (in some days or weeks, it would read 1.48), target 1.3400. exit the trade if a weekly close above 1.5300 is triggered – the high of the US election day.