EUR/CAD breaks double top neckline - short via one touch binary

FX:EURCAD   Euro / Canadian Dollar
98 0
On daily plotting, the pair has formed double top pattern with peak 1 at 1.6105 and peak 2 at 1.5913 levels.

After breaking below the neckline of double top it has also slid below one more crucial supports at 1.4949 levels to reach almost close to 3 months lows.

This range has lasted almost for 3 months, but the moment when it breached the above mentioned resistance, it is a now clear confirmation for medium term trend reversal and bears are being active again.

On monthly charts, after formation of shooting star pattern in last month bears have taken over the swings in their control. That is when it's been drifting down decisively.

21DMA crossing over 7DMA at that juncture which is sell signal (see red colored circle).

We could also see the vigorous momentum in these slumps as both leading oscillators are converging downwards to these slumps, this can even be coupled with volumes conformity on monthly charts.

RSI on daily terms is currently trending at 30.5742, while %D crossover even below oversold zones.

On a break out and shooting star formation and the huge volumes were also in conformity to these slumps.

On a broader perspective, it has drifted lower after dropping from 6 and half years peaks at 1.6105.

But MACD hints the upcoming trend is likely to prolong in the same range like we've been seeing from last 6 months. Long term FX investors may get good hedging arrangements capitalizing on this signal. However, smart way to approach this pair for trading is that follow basics, don't even dare to buck the trend.

Trade Tips:

Taking above technical reasoning into consideration, it is good to buy at every dip and give leveraging effect using 'One touch binary puts' with OTM strikes of 30-40 pips.

The payoffs of touch option has been conditional, if EURCAD in this case would touch the OTM strike price within any time period by the time of expiration, if the investor predicts correctly and the asset touches the strike price the option expires "in the money".

This is likely to generate an exponentially high return of between 80-90% to the binary option investor.

Nevertheless, short term bears can eye on shorts in mid month futures contracts for targets of 200-250 pips with stiff stop loss of 1.51 levels. Please be noted that this exclusively for speculative purpose only.
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