Shooting star has occurred at 1.4981 levels, the bearish pattern evidences slumps below DMAs but bulls counter above 21DMA, the demand and supply zone at 1.4988 levels is seen several times in the recent past.
We see the strength in rallies for now, as the both leading oscillators are signalling the intensified bullish momentum (both RSI and stochastic curves are converging upwards). More rallies likely only upon sustainable momentum, otherwise, bear will have equal chances as the bears have rejected stiff resistance at 1.4721 levels, but please be mindful that the same has also been acted as a strong support in the recent past.
On a broader perspective, you could very well observe the major trend has been oscillating through rising channel (refer monthly chart). One could see as and when the prices touched channel baseline and top line, the price pattern behaves in an adverse way.
From last 4-months, CAD has performed considerably well against euro, but keep in mind that everytime when Dragonfly doji & hammer pops up (especially at channel support) it countered slumps with the vigorous spikes, on the flip side, shooting star & gravestone doji have also occurred at channel resistance to counter rallies.
In the previous month, shooting star followed by the bearish candles with big real body has occurred, consequently, we’ve seen their bearish functionalities.
While both RSI and stochastic curves on this timeframe are showing the downward convergence to the price slumps (refer monthly chart). This indicates the lingering bearish sentiments. The lagging indicators have been indecisive.
Hence, for today, we foresee weakness, next strong support zone is seen at 1.4450-75 levels and dips upto these level can be a favourite odd. At spot reference: 1.4675, bidding one touch binary call option is likely to fetch magnified yields as long as underlying spot FX keeps flying.
Currency Strength Index: FxWirePro's hourly EUR spot index is flashing 27 (which is mildly bullish), while hourly CAD spot index was at -45 (bearish) at 09:30 GMT. These figures of currency indices are also conducive for the above strategy advocated. For more details on the index, please refer below weblink:
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