EUR/CAD Retracement to 1.5000

I’m back with another comdoll cross trade idea this week! This time I’m looking to hop in the euro downtrend with this EUR/CAD retracement setup:

EUR/CAD 4-hour Forex Chart

EUR/CAD 4-hour Forex Chart

As you can see on this 4-hour chart, the pair already made a break below the head and shoulders neckline last month but might be ready to make a retest this time. Price already appears to be finding resistance at the 38.2% Fib while stochastic is heading lower, but I’m inclined to wait for the ECB rate decision to pass before actually setting orders.

While the ECB is widely expected to add stimulus, I’m worried that volatility could surge during the actual announcement, with potential profit-taking likely to result in a few spikes here and there. Besides, the Loonie might also be under some selling pressure for now since the BOC just reiterated their concerns about low inflation.

I think the long-term euro selloff could continue though so I’ll be looking for opportunities to short around the Fibs and trend line after the ECB statement. I plan to set my stop above the 61.8% Fib then aim for new lows. Do you think this is a good idea?

Happy time

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