Critical Price Action one On EUR/CAD
On the daily timeframe, EUR/CAD is forming a decent cup & handle pattern with more potential to the upside.
Currently price action is inside the 1.56 - 1.57 critical support zone on D1, with the previous couple of daily candles showing indecision in the market around this zone (long-legged dojis), which shows bulls and bears war at the current point of price action where buyers try to support price yet sellers are not so weak. But in regards to the cup and handle formation the bias is still to the upside as long as we trade above the 1.56 zone.
EURCAD D1
On a lower timeframe H4, we can see clearly the reason as to why price action is indecisive at the moment, which is because we are trading below 50EMA yet we are still above 200EMA which is an important price level.
This situation gives us two possible outcomes with the first one having a probability:
1) In case price breaks above 1.57 level along with the 50EMA, we would wait for a confirmed successful test to initiate longs targeting 1.59 with stops just below our 1.56 zone
2) Other way around if prices broke below the 1.56 along with a confirmed close and a retest of the 200EMA we should then change our bias to short this pair with more potential to the downside with stops above our critical 1.57 zone.
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