- September 19, 2022
- Posted by: Tradingshot Articles
- Category: Forex
The EURCAD pair hit on Friday the 1D MA100 (green trend-line) for the first time since February 24. It just so happens that this contact is taking place at the top (Lower Highs trend-line) of the long-term Channel Down pattern that the pair has been trading in since mid August 2021.
This level gives very favorable trading opportunities in terms of Risk/ Reward Ratio. Technically being at the top of the Channel, there are higher probabilities for a rejection but it is not absolute as a break above it as well as the 1D MA100 took place on February 03, which only stopped on the 1D MA200 (orange trend-line) two days later, after making a Double Top rejection on the Channel’s previous Lower High.
As a result, the risk is very low in selling now and having an SL at the top of the Channel, while targeting the previous Low at 1.28740. If the Channel breaks to the upside, we can take a short-term break-out buy, targeting the 1D MA200. A break and closing above the Resistance (previous Lower High) should be interpreted as a bullish shift of the trend on the long-term.