FxWirePro: Strategize directional trades for EUR/CAD on bearish engulfing in minor trend and bullish engulfing in major trend

Although EURCAD bulls break-out of falling wedge resistance, the formations of shooting star, hanging man and bearish engulfing patterns counter at 1.5597, 1.1.5617 and 1.54 levels respectively on daily terms, while both momentum indicators signal overbought pressures, whereas the bullish engulfing pattern has also occurred at 1.5617 levels on monthly terms, and hammer candles pop-up at channel support to signify the strength of this pair in the major uptrend (refer monthly chart).

On a broader perspective, the price behaviour, on this timeframe, has been developing ascending channel formation.

Overall, it seems that a tug of war between bearish engulfing on minor trend and bullish engulfing patterns on major trend. Both RSI and stochastic curves indicate the intensified overbought momentum and vice versa on the monthly term. 

Contemplating above technical rationale, at spot reference: 1.5323 levels, we advocate initiating shorts in EURCAD futures contracts of Jan’19 delivery and simultaneously, add longs in futures of Mar’19 delivery. Thereby, one can directionally position in their FX exposures with narrow expiries. The directional implementation of the same trading theme by further allow for a correlation-induced discount in the options trading also if you choose strikes appropriately.

Currency Strength Index: FxWirePro's hourly EUR spot index is flashing at -31 (which is mildly bearish), while hourly CAD spot index was at -30 (mildly bearish) at 13:30 GMT. 

For more details on the index, please refer below weblink: http://www.fxwirepro.com/currencyindex