All Trade Ideas and trading scenarios found on FX360.com are hypothetical. FX360.com has not placed these Ideas in a live trading environment. Forex Trading involves high risks, with the potential for substantial losses that exceed your initial deposit and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

Has EUR/CAD Bottomed Out?

Last updated 4/16/2009 2:22 PM EST (GMT -5) 0 Comments - Add your comment

• Share this:

FX360 Technical Analyst Staff

Technical Analyst, GFT

The EUR/CAD recently entered a previously established major support zone (see daily chart below) completing a Bullish Gartley pattern in the process. In other words, a bullish 161.8%ABCD extension pattern (beginning with the March 19th high of 1.6972) has recently completed near 78.6% support of the XA rally which began with the February 1st low of 1.564.

This alone is enough to raise bullish eyebrows, however, there's additional bullish confirmation in the form of a second bullish ABCD pattern (127.2% ABCD extension) also having just completed as indicated in orange on the 8hr chart below. Prices have already begun to rally so we will look to buy dips* (assuming a favorable risk/reward ratio) with conservative targets near 1.60, 1.62 set just below 38.2% retracements of both CD legs as this currently represents a counter-trend opportunity.  Risk currently sits just below pattern completion (point D) at 1.5830.

 * We will look to buy dips by monitoring smaller timeframes (typically 30min or less) for bullish pattern completion (ideally a bullish gartley or butterfly pattern) in order to quantify risk and assure a favorable risk/reward ratio.

Daily Chart - Bullish pattern completion at D near 78.6% Fibonacci support within previously established support zone. Potential tweezer bottom also developing...	8hr Chart - Additional bullish confirmation with 2nd ABCD pattern completion (orange).

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

Loading...