EUR/CAD 4H Chart 2/18/2012 8:00AM EDT
Falling channel: The 4H EUR/CAD chart shows a market trading in a falling channel. Since finding support last week at 1.3325, it has rallied to 1.3473 before finding some resistance. As we near the channel resistance, there are a couple of breakout trade ideas.
Upside break: A break above the current resistance by clearing 1.3475 might open up the 1.3560-65 resistance pivot area. It would need to break above a falling channel resistance as well. If this occurs with the 4H RSI pushing above 60, we could be turning back to a bullish trend that started back in August 2012. Above 1.3565, the focus would turn to the high near 1.37.
Downside break: However, if the channel resistance holds and price falls below 1.3410, we are likely still following the falling channel with the 1.33 handle up to the 1.3325 low as the first key area to be tested as support.