Potential ABCD Pattern on EURCAD (600+ pips)

14 Apr 2017

Hey all! It's been a pretty quiet week so far but I've been patiently watching several pairs to see if any plans become more viable. EURCAD is one of these pairs and I was specifically waiting to for it to show signs of a reversal off of the 0.618 retracement. Now that it has done that, we can predict a potential bearish long-term ABCD pattern forming here - assuming that the D leg goes to completion. If this happens, we can also predict that the price will hit the 1.272 retracement at the 1.47540 mark sometime in late May 2017 then come back down to any of the 3 fib retracement levels (Drawn in red and based on the A-D leg) in Early June. I'm also expecting minor consolidation on both the bullish and bearish drives between the 1.42993 and 1.43491 price levels that may end up determining which target is most likely to be hit.

As we've seen in previous ABCD and 3-drive patterns, trading the C-D leg is very risky and I wouldn't really advise it. This is more of a proof of concept should the idea materialize.

In any case, we have two plays for both the risky and conservative traders:

Aggressive Setup
Entry: 1.41698
TP: 1.47586
SL: .1.40672

Conservative Setup
Entry: 1.46586
TP: 1.43778, 1.42606, 1.41463
SL: 1.48319

16 Apr 2017

Catatan

I've had a few questions about the long term bearish trend that this pair is experiencing. Though it is not untrue, there is an even larger ascending channel showing a long-term bullish sentiment. So which one do we go by? For the purposes of this pattern the bearish trend is very important, BUT the price has just bounced off the 1.40644 S&R level which means this structure is not totally negated. For the time being, I am neutral on this pair. Time will tell.