EUR/CAD Key Points
- Higher time frame, EUR/CAD support zone broken and retested.
- Intraday, short term support retested as resistance to give us a short entry.
- Trade played out profitably, with even a chance to get in a second time.
EUR/CAD Technical Analysis
Morning team,
Today's analysis is a trade recap of yesterday's EUR/CAD short trade analysis that I whipped up whlie waiting for my plane in Adelaide.
If you missed it, click that link and check out the setup I'm talking about, but here's a quick extract as a refresher:
The intrday chart shows price retesting the higher time frame support zone as resistance at the first arrow and then the short term support candle that formed to give us a possible entry on a retest.
Let's see if we get any sort of momentum coming out of this zone.
Momentum, did you say?
Take a look at yesterday's price action from the weekly open, onward (I've kept the MT4 period separators on, so you can just see the day's price action more clearly).
With price below the higher time frame, horizontal support/resistance zone, we were focusing on only trading from the short side.
Price then printed a short term support candle (highlighted in grey), which we could use to manage our risk around and get a short entry with a good risk:reward ratio.
As price retested the short term support zone as resistance, the short entry was there. The conservative approach was keeping your stop above the higher time frame zone, whlie the aggressive was to keep it just above the grey box.
On the initial momentum move down during the Asian session, whichever way you decided to trade it, your stop would have survived and at least 1:3 profits could have been taken.
If you missed the first entry, price was even kind enough to give you a second chance later in the trading day. Price did poke through the short term zone in grey, but anyone late to the party, who wasn't super aggressive there, could have still jagged it.
This trade played out beautifully and again goes to show that conrary to popular belief, you don't have to always rush to get the best entry. The market will so often give you another chance to get in.
Well done to anyone who jagged it.
Best of probabilities to you!
Dane.
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