Trade Recommendation: EUR/CAD

The Euro/Canadian Dollar pair (EUR/CAD) lost its bullish steam in March 2009 when it generated a lower high of 1.69708. Things went from bad to worse for the pair when it broke below support of 1.55. For six straight months, EUR/CAD posted long red candles before it established a bottom at 1.24476 in June 2010. In a little over a year, the Canadian Dollar shred 26.65% of its value against the Euro.

Having lost over a quarter of its value, EUR/CAD rallied, and it was able to reach 1.43762 in June 2011. However, bears repelled the advance, and sent the market back to support of 1.25 in September 2012. With a successful retest of the bottom, the market started gathering bullish momentum. Recently, it was able to break through a major resistance level.

Technical analysis show that the Euro/Canadian Dollar pair has taken out 1.55 resistance in February 2018. The price action triggered a large bullish cup and handle pattern on the monthly chart. The force of the breakout was so strong that the pair went as high as 1.61510 this month. However, it is near overbought territory, so we can expect it to dip. This is your chance to enter the market while it is in the early stages of what could be a long bull run.

The strategy is to buy as close to 1.55 as possible. If the pair manages to stay above the breakout point, it will likely use the new support to climb to our target of 1.85. The process may take more than one year.

Monthly Chart of EUR/CAD on Forex.com

As of this writing, the Euro/Canadian Dollar pair is trading at 1.58412 on Forex.com.

Summary of Strategy

Buy: As close to 1.55 as possible.

Target: 1.85

Stop:  1.525

 

Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.

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