By: DailyForex.com

The EUR/CAD pair fell during the session initially on Monday, but found enough support to turn things back around and form a pretty good looking hammer. The hammer of course suggests that the buyers are starting to step into the marketplace, but don’t be fooled: this market is without a doubt very bearish, and should only remain so over the longer term.

This chart could be a buying opportunity for those of you who are short-term traders, but when I like to think about when I see a chart like this is that it is telling me I can buy Canadian dollars “on the cheap.” What I mean by this is that we will more than likely get some type of bounce from here, but at the first signs of weakness I have to be willing to sell this market.

Downtrend should continue, especially if the oil market is to be believed.

The oil markets continue to impress, although we did have a slightly negative session during the day on Monday. Markets in that region of the world are pulling back a little bit, and that might be the catalyst to push this market higher. However, the 20 day exponential moving average has been dynamic support and resistance in a fairly reliable manner over the last several months, and it happens to line up nicely with the 1.4750 region, an area that I see a lot of clustering and therefore sell orders. This should be an area of that the buyers really struggle to push the market above.

With that in mind, I think simply sitting on the sidelines and waiting for the opportunity to sell this market at a higher level is probably the best way to go right now. Normally, I would not hesitate to sell a break of the bottom of the hammer if we fall again during the session on Tuesday, but since we are so close to the 1.45 handle, I would probably forgo selling this market without a bit of a bounce first.

EURCAD Daily 62414

Related Articles
  1. Stock Analysis

    JCPenney's Path To Profitability (JCP)

    Learn about what J.C. Penney's management team has been doing to profitably grow its business as the company recovers from years of revenue declines.
  2. Investing News

    Hillary Clinton's Liberal Orthodoxy

    Clinton's economic agenda laid out in July is divided into three broad groups: strong growth, fair growth and long-term growth. And her overarching goal is to "give working families a raise."
  3. Investing News

    Bernie Sanders: Socialist or Liberal?

    Sanders' pitch centers on economic inequality in the U.S., which is both more severe than it is in other developed countries and, if current trends continue, projected to worsen.
  4. Mutual Funds & ETFs

    Top 5 Natixis Funds for Retirement Diversification in 2016

    Discover five mutual funds from Natixis Funds that provide high income, growth and preservation of capital while diversifying a retirement savings plan.
  5. Mutual Funds & ETFs

    4 Mutual Funds You Wish You Could Include In Your 401(k)

    Discover four mutual funds everybody wishes were in their 401(k)s. Learn which five-star-rated no-load funds leave their competition in the dust.
  6. Insurance

    Beware the Sneaky Math of Universal Life Insurance

    Universal life insurance's cash value can be a cash cow – if there's any left. Read on to see if it'll work as an income source after you've retired.
  7. Mutual Funds & ETFs

    The 4 Best Indexes for Dividends

    Learn about some of the biggest dividend indexes in the marketplace and which niche of the dividend universe each of these indexes targets.
  8. Stock Analysis

    If You Had Invested Right After Berkshire Hathaway's IPO (BRK.A)

    Learn how much you would now have if you had invested right after Berkshire Hathaway's IPO, and find out the classes of shares that you could invest in.
  9. Mutual Funds & ETFs

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  10. Stock Analysis

    3 Chip Makers Betting on the Drone Industry in 2016 (INTC, QCOM)

    Find out which of the big chip makers are betting heavily on a burgeoning consumer drone market that could be the next big wave in consumer electronics.
RELATED FAQS
  1. What is arbitrage?

    Arbitrage is basically buying in one market and simultaneously selling in another, profiting from a temporary difference. ... Read Full Answer >>
  2. What is Fibonacci retracement, and where do the ratios that are used come from?

    Fibonacci retracement is a very popular tool among technical traders and is based on the key numbers identified by mathematician ... Read Full Answer >>
  3. What is a derivative?

    A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, ... Read Full Answer >>
  4. What is finance?

    "Finance" is a broad term that describes two related activities: the study of how money is managed and the actual process ... Read Full Answer >>
  5. What items are considered liquid assets?

    A liquid asset is cash on hand or an asset that can be readily converted to cash. An asset that can readily be converted ... Read Full Answer >>
  6. What is comparative advantage?

    Comparative advantage is an economic law that demonstrates the ways in which protectionism (mercantilism, at the time it ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center