$EURCAD: Potential Trading Zone

Thursday, January 2, 20140 comments


What we know:
Price has been extremely bullish. RSI was between 80 - 40 region, especially since the period shown with the blue trend line.

1.4413 acted as resistance, so this could come in as support.

1.411 - 1.401 was resistance turned to support.

RSI's current values show a peak of 84.31 in this uptrend. Price makes a higher high while RSI starts pushing lower.

Observations:
Not a good idea to short as the trend is up. Price is likely going through a correction. Possible reversal could happen at 1.445 - 1.441.

But.. if RSI does respect its recent moves, we could see RSI drop to 30

If you scroll to the left, since RSI bottomed out at 20 and started the bullish trend, the lowest it made was 25. So if RSI dips to 30, it should indicate a dip to this rally, making it a prime area to buy EURCAD.

Comparing previous RSI moves (rep. by arrows/distance), 1.4459 looks like a possible level to reach.

What we need:
A break of 1.44 level to retest 1.411 - 1.401. Then look for bullish candle patterns + RSI confirmation to go long. Will update this chart when we get there.
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