FX.co ★ vicente13 | EUR/CAD

Hello traders, The currency pair EURCAD - W1 chart. Not so long ago, for many weeks in a row, the price was moving sideways with a slight downward bias, week after week. It has been a while since a descending correction could have been made after a significant previous rise, but no, the price seemed to be pinned here. The wave structure is clearly built in an ascending order, the MACD indicator is transitioning into the lower zone and is below its signal line. Previously, a five-wave structure can be seen here, starting from the end of 2024. This is a complete growth cycle after which a correction was expected, and it is happening now. Even the presence of bearish divergence on the indicators used earlier did not help much until recently. Since the timeframe is higher, the signal is very strong, and it was highly probable that it would play out. Switching to the monthly view, it is evident that there is a strong resistance zone nearby. In previous years, there are three peaks of such global significance here, which is a strong argument for expecting a proper decline from this point. These three peaks were broken upwards, forming a selling zone. The presence of a set of arguments for a decline here indicated that working downwards on lower timeframes should be considered. If formations for growth appear on smaller timeframes, it was better to skip them. Trading upwards against such a set of arguments for a decline is not the best decision. The sideways movement near the top lasted quite a while. However, the technical signals for a decline worked out, and the third wave occurred. The obvious target here could be identified as the horizontal support level at 1.5784, this target was achieved, albeit with a significant delay, even falling deeper. It was expected that further downward movement without a pullback was unlikely, a pullback upwards to the broken level at 1.6060 was probable, and it happened. The price even climbed slightly above it, so I believe it is necessary to look for selling formations on smaller timeframes.