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.
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