EURCAD: Level Not Reached Since Early December 2009, as Bullish Trend Builds
The daily candle chart below shows the price history of the Euro currency (EUR) versus the Canadian dollar (CAD), known as the EURCAD pair, and trading near 1.5286 after making a fresh multi-year high today at 1.5345.
Last time the pair traded at this high was back in early December 2009, and looking at the last time EURCAD was covered in the Ideas You Can Trade series the trend was noted as strikingly bullish with resistance near 1.5000 and an expected pullback that didnt happen as it was subsequently breached as the pair had since trended higher.
In recent weeks resistance had built just under 1.5300 on a number of occasions with today's breakout above this level signaling a potentially very bullish continuation, whereas a pullback below 1.5300 could mean a false upside breakout and that resistance on this line is still valid, with a retreat following.
Below are examples of how to trade a bullish continuation a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 1.5360 with a Limit to take profit @ 1.5389 and a stop-loss @ 1.5336 Risk/Reward Summary: Limit risk = +29 pips profit /(-24) Stop-loss risk = Gain to Loss ratio = 1.20
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 1.5198 with a Limit to take profit @ 1.5139 and a stop-loss @ 1.5241 Risk/Reward Summary: Limit risk = +59 pips profit / (-43) Stop-loss risk = Gain to Loss Ratio = 1.37
Medium term daily candle chart: