A Quick Update On The Pair EURCAD To SELL. Breakout Happened As I Predicted

Forex Analysis #6

Selling the pair EURCAD according to my BREAKOUT-PULLBACK Strategy

Hey there, TraderSaan is here.
Today I am going to share a quick update in EURCAD which I have set yesterday, if you missed the forecast, click the link below.
Traders. Attention here please! Breakout-Pullback setup on EURCAD

The strategy I am going to use is called BREAKOUT PULLBACK strategy. If you don't know about the strategy, please pay a visit to the link below.
The Breakout Pullback Strategy For Trading

I am actually a swing trader, meaning I hold my position for 2-3 days or more. So I usually trade at the timframe of 4 hour (H4), 1 hour(H1), or occasionally at 30 miniutes (M30). And one more thing is that I analyze the chart in tradingview and take trade in MT4 (for FOREX) and Binance ( for CRYPTO).

Well, price has broken out the support zone in the downtrend, and as the breakout has already happened I am going to wait for the pullback for a short entry there

Fundamental Outlook : Bearish

Actually I am fundamentally bearish on EUR and bullish on CAD, so that implies I am bearish on the pair EURCAD. So here are some reasons :

EUR :
• The EURO is depretiating after the Russian invasion in Ukraine, as Russia was a major exporter of energy and commodities to the Euro zone. And we have seen the insane rise of OIL price since 23 February this year, i.e., when the war was started.
• The EUR is a risk on currency which means when any geopolitical or pandemic issues arise, this currency depretiates particularly. That is a reason EUR is devalueing against other major currencies as the COVID variants has appeared one by one.
• The inflation is very high in the EUR zone curently which has been a big issue to set their monetary policy. The ECB president uttered about rate hike in the last press conference, but it seems they are hesitating in some extent.

CAD :
• On the other side CAD is aggressively appreciating as the OIL price is skyrocket after banning the Russia from business deal by Joe Biden first sanction. Canada is one of the major country of OIL supplier, so this country is taking advantage of the energy crisis environment.
•Canada is coming forward to make a rate hike which is attracting many traders and investors to its currency - CAD.

Technical Chart Analysis :

All the charts shown below is in 4 hour time frame( H4)

• Look, how beautifully 50&200 MA are aligned downwardly which indicates the heavy selling pressure of the market.

EURCAD, H4, 50&200 MA

Image source: tradingview, prepared by me

• Price has been resisted by a beutiful downtrendline or area which makes me short biased in this market. Look at the chart below, whenever price went up to the downtrend line, a heavy sell off has hapened.

EURCAD, H4, downtrendline

Image source: tradingview, prepared by me

• So far, price has broken the defined support zone to the downside and I am waiting for a healthy pullback/correction/retracements/profit taking move to the upside - to the broken support zone which is also the 38% mark of Fibonacci Retracements tool.
And all of this make me to go short in the zone which I have shown an golden ellipse(the entry zone)

EURCAD, H4, the possible zone for short entry

Image source: tradingview, prepared by me

• Now that I have come to this decision with both fundamenta and technical analysis that I am going to short the market. Let's now talk about the exact entry price, stop loss, target profit

ENTRY: The exact price of the short entry is shown in a black coloured line in the chart below, which is at 1.36900 level.

Stop Loss: The exact price of the short entry is shown in red coloured line in the chart below, which is at 1.37290. So my SL is 39 pips.

Target Profit: I have two target profits for this trade which is shown by the dotted line in the chart below. TP1 is at 1.34080 and the TP2 is at 1.30220.

Risk To Reward Ratio(RR): For the TP1, the risk to reward ratio is 1:7. and for the TP2, the risk to ratio is 1:17 which is insane.

EURCAD, H4, ENTRY, SL,TP

Image source: tradingview, prepared by me

I always take a trade when my fundamental and technical analysis say the same thing. As follows:

Case I
Fundamental = buy, Tchnical = sell, that implies Not To Trade

Case II
Fundamental =sell, Technical = buy, that implies Not To Trade

Case III
Fundamental = buy, Technical = buy, that implies Jump In For Buying

Case IV
Fundamental = sell, Technical = sell, that implies Jump In For Selling

Disclaimer: This is not any financial advise or trading mantra. My purpose is to help traders to learn. This post is made for completely educational purpose. Hope it helps.

Thank you very much if you make it to the end. Happy trade.