- The pair trades within a channel within a horizontal channel
- The price trades around the channel’s support
- The H1 chart may end up producing an Inverted Head and Shoulder
- Intraday price action has been choppy
EUR/CAD A Horizontal Channel Traps the Price
The pair has been choppy on the H4 chart. The chart shows that the price gets caught within a horizontal channel. The level of 1.46530 has been working as support and the level of 1.47830 has been working as resistance. Simple Moving Average 30 has been a resistance. Thus, it looks indecisive so far. If the pair breaches SMA 30, it may head towards the North. The buyers may consider taking a profit around 1.47830. A breakout above that level may set a stronger bullish tone and push the price towards the North further with good momentum. On the downside, if the price makes a bearish breakout 1.46530, the price may head towards the South and find its support around 1.44800.
An Inverted Head and Shoulder Pattern is being Formed
The chart shows that it had a rejection twice at 1.47830 and made a strong bearish move. A bullish correction followed by another bearish move and then another bullish move up to 1.47200 signifies that it is about to produce an Inverted Head and Shoulder pattern. If the price breaches the level of 1.47200, the buyers may be very interested in buying the pair and push the price towards the North. The price may find its resistance around 1.47830. However, if the level 1.47200 works as resistance again, the pair may remain choppy on the H1 chart for a while within 1.47200-1.46530.
The H4 chart looks choppy. The H1 chart looks good for the bull. It needs to make a move and make a significant bullish breakout though. A bullish breakout on the H1 chart may set a strong bullish tone in the pair and make the pair remain bullish for a while on the H4 chart as well. Let us wait and see what happens next.
Written by: Md Tareq Sikder, Senior Analyst Forex Prop News
Contact and follow Tareq on Twitter: @tareqfpn