EUR/CAD price analysis: holds the top of the wedge
EUR/CAD price analysis: although signals are far from strong, selling at trend line resistance offers ample reward against risk set-up
Market highlights from the past week
Monday July 13: in comments on Monday, German Chancellor Merkel stated that Italy and Germany had agreed on the basic structure of the recovery fund, but she was unable to say whether agreement would be reached on the budget and recovery fund at this week’s Summit
Tuesday July 14: there was some caution ahead of Wednesday’s Bank of Canada policy decision
Wednesday July 15: there were comments from French officials on Wednesday that they believe a deal can be reached this week on the EU recovery fund
Thursday July 16: the ECB made no policy changes and President Lagarde indicated the whole PEPP emergency bond-buying envelope would be used
Friday July 17: markets remain focused on the EU Summit which convened in Brussels
EUR/CAD Price Analysis
Let us have a look at the technical viewpoint:
Monthly: price has moved sideways with four successive monthly Inside Bars. This highlights indecision and the lack of real trend in this timeframe.
Weekly: the gap was closed from 1.5150-1.5375 (week March 2 -10). Mixed results. The RSI (Relative Strength Index) is close to 50 highlighting we are non-trending
Daily: the 50 per cent Fibonacci level is located at 1.5523 (from 1.5991-1.5053). The cross posted a Bearish Outside Day on July 15. This candle is often seen at the top of a trend and the start of a new downward bias.
Intraday four-hour: forming a bearish Ending Wedge pattern. A break of 1.5390, trend line support, and the measured move target is 1.5226. We have seen price rejection of the trend of higher highs this morning
Outlook: although signals are far from strong, selling at trend line resistance offers ample reward against risk set-up.
Possible trade set-up:
Action: selling at the market (currently 1.5553)
Stop: 1.5593 (above the wedge)
Target: 1.5226 (wedge target)
Potential return on risk to first target: R8.1 (reward 327/risk 40)
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