Could 1.50 Resistance Spark Another 1,000 Pip Drop?The EURCAD pair has been steadily rising since the beginning of the year. After a brief stall at the 1.48 weekly resistance, which was broken last month, we have seen a drop and retest of this level, now acting as support. Price has already surpassed last month’s high this week. So, what’s next?
The most logical next target for bulls is the 1.50 resistance, a historically tough level to break over the past four years. Each attempt to move past it resulted in the weekly candle closing below the level. If you read a previous idea I posted last year on this pair we sold at the exact same level
In fact if you zoom into the daily charts we can see that price is actually stuck in a near 1,000 pip daily range between 1.51 and 1.42 (see image below)
I expect price to move up into the top of the range between 1.50 and 1.51. At this point, I will look for sell signals using my TRFX indicator or signs of slowing momentum on lower time frames.
To identify slowing momentum, I examine lower time frame charts (4-hour to daily) for price transitioning into a sideways movement pattern as it approaches the sell zone. Divergence signals on the MACD are particularly useful for spotting this momentum shift.
My first target for this position is the previous resistance, now support, slightly below 1.48. Price may see a short bounce at this level and possibly retest 1.50, where we can enter another sell signal.
Next, I target a move down to February’s weekly swing low at 1.45, followed by a move to the bottom of the range at 1.42. The likely path is charted below.
For this trade to be invalidated, we would need to see a weekly or monthly close well above 1.50, indicating buyers aiming for mid-1.50 levels.
Given past reactions at 1.50 and the significance of this high time frame (HTF) level, a sell position is the most realistic approach for now.
Let me know your thoughts below.
