Hi Traders! Today I am sharing with you the EURCAD technical analysis and 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 Traders Academy Club Spoiler alert – free memberships are available! here). Now, let’s start our analysis from the highest timeframe which will be the daily chart here.
EURCAD D1(Daily) Chart Analysis – Key Support Zone, ADX Indicator
On the daily chart, the price which is moving lower has broken below a key support zone formed by the 100% (1.51218) Fibonacci expansion level of the big wave and the 100% (1.50743) Fibonacci expansion level of the small wave. Currently, it looks like the price is retesting this area, we may consider this as evidence of bearish pressure. The price still has room lower towards the next key support zone formed by the 161.8% (1.47543) Fibonacci expansion level of the big wave and the 161.8%(1.47124) Fibonacci expansion level of the small wave. In addition to this, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bearish pressure. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
EURCAD H4(4 Hours) Chart Analysis – Heikin Ashi Candles, Bearish Hidden Divergence, Stochastic Oscillator
On the H4 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment.
Also, currently, it looks like a correction is happening. We also have a bearish hidden divergence that has formed between the first high that has formed at 1.52695 and the second high that has formed at 1.50604 based on the histogram of the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, we could see that the Stochastic Oscillator has reached it’s extreme, which we may consider as another evidence of bearish pressure. Until the strong resistance zone (marked in blue) shown in the image below holds my view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
EURCAD D1(Daily) Chart Analysis
- Key Support Zone, ADX Indicator
EURCAD H4(4 Hours) Chart Analysis
- Heikin Ashi Candles, Bearish Hidden Divergence, Stochastic Oscillator
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 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.
You will also find a pretty extensive database of educational materials here in the blog – just use the search or check out the Forex Education section above.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
