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 Traders Academy 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 – Key Support Zone, Bullish Divergence
On the H4 chart, we have a key support zone that has formed based on the 261.8%(1.33767) Fibonacci expansion level of the first wave and the 61.8%(1.33507) Fibonacci expansion level of the second wave. The price which was moving lower, reached this key support zone, respected it and is currently bouncing higher from this zone. Also, we have a bullish divergence that has formed between the first low that has formed at 1.34432 and the second low that has formed at 1.33893 based on the MACD indicator, which we may consider as evidence of bullish pressure. In addition to this, we have this bullish divergence on the RSI indicator as well, which we may consider as yet another evidence of bullish pressure. Also, currently there are no signs opposing this short term bullish view. We may now move down to lower timeframe and look for evidences supporting this short term bullish view.
EURCAD H1(1 Hour) Chart Analysis – Bullish Divergence, ADX Indicator
Looking at the H1 chart, we could see that the price which was moving lower has created a bullish divergence here as well, which has formed between the first low that has formed at 1.34217 and the second low that has formed at 1.33893 based on the MACD indicator, which we may consider as evidence of bullish pressure. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. So everything looks good here for the bulls and until the H4 key support zone holds my short term view remains bullish here. If we get a valid breakout above the high at 1.34760 we may then consider it as a validation for this short term bullish view and may expect the price to move higher further.
Technical Analysis & Forecast Summary
EURCAD H4(4 Hours) Chart Analysis
- Key Support Zone, Bullish Divergence
EURCAD H1(1 Hour) Chart Analysis
- Bullish Divergence, ADX Indicator
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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy 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
Traders Academy Club Team
