While browsing through some less discussed pairs last week, I found a trade setup in EUR/CAD. After hitting the bottom at 1.2130 last year, this pair has been continuing its upward rally ever since. As European reports are coming strong and Canada is acting a bit weak lately, it is possible that the uptrend will continue for a few more weeks. I triggered my order when a pullback occurred in the trend line. At 1.3800, it is a psychological level and the 61 percent retracement area too. This combination will attract more orders for sure, making the level stronger.
I am targeting 1.4100 as my profit target, with a stop loss positioned at 1.3715. I have placed the stop loss just below the confluence of lines. A drop from these lines will cancel my trading idea. I am being cautious about this pair as my broker, Oanda’s economic calendar is showing some big events scheduled for this week. My primary profit taking level is the previous swing high.
I am also following the Canadian and European events carefully. If both of these support my trading idea, I may continue my trade. The unexpected happened suddenly with the ECB comments. As news came out that policymakers are discussing lower interest rates, all the euro pairs started going down, including EUR/CAD. Nonetheless, I thought it was a temporary reaction and the actual trend will be restored soon. But, that did not happen and I got stopped at 1.3715. I think it’s time to say better luck next time.
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