Hi Traders! Today I am sharing with you the EURCAD technical analysis and short-term forecast post. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club Spoiler alert – free memberships are available! here). Now, let’s start our analysis from the highest timeframe which will be the H4 chart here.
EURCAD H4(4 Hours) Chart Analysis – Lower Lows, Bearish Hidden Divergence, Stochastic Oscillator
Looking at the H4 chart, we could see that the price which was moving lower has created lower lows based on the MACD indicator which is a sign of gaining momentum toward the bearish side. Currently, it looks like a correction is happening. In addition to this, we could see that the price has created a bearish hidden divergence between the first high that has formed at 1.45199 and the second current high that has formed at 1.44234 based on the MACD indicator, which we may consider as evidence of bearish pressure. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and we may now move down to a lower timeframe and look for evidence supporting this short-term bearish view.
EURCAD H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Bearish Divergence, Two Strong Resistance Zone
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. Also, we have a bearish divergence that has formed between the first high that formed at 1.43875 and the second high that formed at 1.44351 based on the MACD indicator supporting the H4 bearish hidden divergence, which we may consider as evidence of bearish pressure. Also, we had two strong support zones that have formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold, my short-term view remains bearish here and a valid breakout below the most recent uptrend line would be the validation for this short-term bearish view.
Technical Analysis & Forecast Summary
EURCAD H4(4 Hours) Chart Analysis
- Lower Lows, Bearish Hidden Divergence, Stochastic Oscillator
EURCAD H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, Bearish Divergence, Two Strong Resistance Zone
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
