The EURCAD bearishness continues as price pushes yet again to new lower lows. The head and shoulders pattern (purple boxes) and the subsequent break of the neckline (purple line) has introduced 6 weeks of bearishness and the downtrend “party” might not be over as yet.
The most recent bear flag (orange) line was broken in today’s price action after yesterday’s daily candle signaled indecision at a key 38.2 Fibonacci retracement level. For those who are not in this trade, a retracement of today’s daily candle could still be worth a pending entry order during tomorrow’s trading. The pending order can be placed half way today’s candle with a stop loss above today’s daily candle high.
There is one scenario however where a pending order would be invalidated. A pending order should be deleted when the daily candle close fails to confirm whether the bears remain in control. To be specific, a close which is not more than 20-30% off of the daily low would signal a decent control of the bears. Anything more than that signals weakness.
The take profit levels should not be placed lower than the big daily bottom (blue line). I myself am aiming at the Fibonacci targets.
The GBPUSD does not have a clear cut trading setup BUT it is showing a very fascinating structure. This particular pair must tickle the curiosity of any and every trader.
The Cable is being pushed by a tremendous uptrend and momentum but the resistance level has iron strength as well. Why?
Because the 1.7040 is a resistance level which dates back to August 2009. When a level has not been seen in 5 years, the “reunion” of price with that key level could provide fireworks. Read more here.
After 2 dojis and 2 bearish daily candles, the GBPUSD is showing intra-day strength today by breaking above yesterday’s daily high.
Will the GBPUSD be able to break above the 1.70-1.71 resistance and march forward?
Or will the Cable fail to break through and is reversal around the corner?
Let us know YOUR opinion down below! Thanks!
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