EURCAD preparing for a Bear Run?

EURCAD is having an impressive run to the upside and has climbed almost 400 pips in the last couple of weeks. EURCAD bulls are taking advantage of recent strength from Euro and weakness in Canadian Dollar, which has also weakened against most of the other currencies.
I now think that EURCAD will soon present an excellent sell opportunity. We are looking for a sell opportunity from around 1.3950/90 zone, as pointed out in a daily chart below. We expect a push higher to somewhere around to this zone with RSI pushing higher to the extreme zone.
One of the same scenarios happened earlier as well (marked as red arrows in the chart below) when RSI was at extreme, and we witnessed a nice bear run of more than 500 pips.

There is also a bearish butterfly on 4H chart calling for a short setup from the same zone i.e. 1.3950/90 along with continuing divergence on 4H chart to favor our bias.
So, we are waiting patiently for this pair to form a bearish setup. If we get into the trade, then we can hold it for a nice bear run. Targets may vary depending on short to medium term bias, but we will be looking for at least 100 pip profit from this trade.

One of the other reasons I can consider for selling this pair is that I think EURUSD is under short term topping process and can present a selling opportunity as well in coming days.
I think that the recent strength in Euro is overdone, and some of the Euro crosses need some correction. So, EURCAD can be one of the options to look for.
Another one could be EURGBP which can soon test a major trend line on the daily chart. A break and close below the said trend line in EURGBP can also put pressure on Euro in short to medium term.
In addition, we need to keep an eye on Canadian Employment data, which will be released tomorrow. Market is expecting improvements in employment sector for Canada. And, if the numbers come out well it may help our short bias for EURCAD.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURAUD, AUDUSD, OIL, NZDUSD, NATURAL GAS, DOW JONES, EURUSD, USDJPY, and EURGBP.
For more details: Vladimir’s Markets Forecast

Trade well friends. Happy trading!

Vladimir

Click To Join Our Community Telegram Group