I’ve got a new comdoll trade idea this week and I’m looking at another forex cross pair. Here’s my plan for EUR/CAD:
As you can see from the 4-hour forex chart above, the pair recently broke below a major support area around the 1.4000-1.4100 psychological levels then fell to the 1.3900 handle. From there, price pulled back up to the broken support zone, which lines up with the 50% Fibonacci retracement level.
Stochastic is already in the overbought zone, suggesting that euro bears might take control of price action and push EUR/CAD back to the previous lows and beyond. I’m thinking of shorting at market with a wide stop past the 61.8% Fib and aiming for new lows.
My fundamental bias for this pair is to the downside, as the euro is facing the prospect of further ECB easing. Meanwhile, Canada has been consistently posting strong economic figures so far, which might lead the BOC to switch to a more hawkish stance. Heck, Canada’s annual CPI is already way above the central bank’s 2% inflation target so market participants are already buzzing about potential policy tightening.
Here are my trade details:
Short EUR/CAD at 1.4050, stop loss at 1.4150, initial PT at 1.3900.
What do you guys think?
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