EUR/CAD Technical Analysis – January 21 2015

The EUR/CAD pair had a positive session on Tuesday, breaking above the top of the shooting star that had formed on Monday. However, we are running into resistance at the 1.40 level which of course was massive support previously. With that being said, I believe that this market could run into a bit of a brick wall here. However, what is interesting about this pair is that it features two currencies that are currently struggling at the moment.

The Canadian dollar has collapsed against the US dollar as the USD/CAD pair broke above the 1.20 level handily during the Tuesday session. On the other hand, everybody knows of the Euro is in a lot of trouble. All things being equal though, I believe that the downtrend will more than likely continue but we may have a day or two of positive action in this pair. Quite frankly, I see resistance all the way up to the 1.42 level, so anywhere between here and there that we form some type of resistant candle is a selling signal as far as I can see.

In fact, I’m even comfortable shorting this pair on the four hour chart if not the one hour chart. It does not have to be a daily candle for me to sell, but obviously that is a bit more “safe”, if there is such a thing in Forex trading. It would be going with the trend if we get a selling opportunity, and that of course is something that I like as well. Keep in mind that the Canadian dollar does have the advantage of being a North American currency, so that may outweigh what’s going on in the oil markets that obviously has been working against the value of the Canadian currency overall.