EURCAD at 2009 Highs – Is a Massive 1,000 Pip Sell-Off Imminent?It's been a while since my last idea! (Too busy traveling lately 😅)
Today, we're zeroing in on a high-probability short setup on EURCAD. This pair has surged strongly since the start of the year, fueled by all the Trump-related market chaos.
Once we smashed through 1.52—last year's key resistance (a level where we previously banked over 600 pips on a massive drop)—the market has been steaming towards the next major SELL zone between 1.58 and 1.615. This area has been rock-solid resistance since 2009, causing significant sell-offs each time we've tested it. Can history repeat itself? Let’s dive into the charts.
Weekly Chart:
After the initial spike into our key zone in early March, we saw an immediate 600-pip rejection, but buyers quickly regrouped and drove the pair to fresh highs near 1.60. Crucially, we're now seeing a lack of follow-through on recent highs, which is a classic sign of buyer exhaustion. Even more telling, this week's candle is a spinning top—a textbook reversal signal.
Daily Chart:
Zooming into the daily timeframe, price action is becoming increasingly choppy with multiple rejection candles at the highs—clear signs that sellers are starting to step in. Additionally, MACD divergence is glaringly obvious, reinforcing the bearish setup.
4-Hour Chart:
At the 4-hour level, the market is now trapped in a tight sideways range between 1.57 (floor) and just above 1.58 (ceiling). The MACD continues to signal divergence—another strong indication that the bullish momentum is losing steam and a reversal is likely imminent.
How I'm Trading It:
Given all these signals, I'm using my TRFX indicator to build a long-term short position, targeting sell signals on the 8-hour and daily charts. The daily chart alone has been flashing multiple sell signals already (see below):
One last thing: Don’t be surprised by a quick fake-out spike toward the upper bound at 1.615—it’s very common in setups like these. Any sharp spike up should get quickly rejected, giving us another great selling opportunity.
Targets:
First Target: Last year's major resistance at 1.52—expect a reaction and possibly a bounce here.
Second Target: Longer term, I'm eyeing a deeper move toward the major support level around 1.43, offering a huge profit potential if the reversal fully plays out.
That's my game plan—let me know your thoughts below! 😊
