EURCAD Trend Analysis

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It sounds like you're analyzing a currency pair or another financial instrument where the price has been testing a key support level around 1.4600 multiple times. Here's a breakdown of your analysis:

Key Support Level (1.4600):The price has repeatedly tested this level but hasn't managed to break below it decisively. This suggests that buyers are stepping in whenever the price approaches this area, indicating possible strong buying interest or support at this level.

Market Dynamics: Each time the price approaches 1.4600, selling pressure builds up, but buyers have been able to absorb this pressure, preventing a significant breakdown below the support level.

Technical Breakout: You mentioned that the descending channel has been broken. A breakout from a descending channel is often seen as a bullish signal, indicating a potential shift in momentum from bearish to bullish.

Trading Opportunity: According to your analysis, if the price retraces back to around 1.4683 after breaking the descending channel and undergoes a correction, you are considering a long trade. This strategy aligns with the idea of buying after a breakout and subsequent pullback to a key support-turned-resistance level (1.4683 in this case).

Trading Plan:

Entry: Look for a long entry if the price retraces to around 1.4683.
Stop-Loss: Set a stop-loss below the recent swing low or below 1.4600, depending on your risk tolerance and the structure of the price action.
Target: Set a target based on your risk-reward ratio. This could be based on the next resistance level or a Fibonacci extension level, considering the potential upward movement after the breakout.
Considerations:

Confirmation: Wait for confirmation that the price is indeed retracing to 1.4683 and showing signs of a correction before entering the trade.
Risk Management: Always manage your risk by using appropriate position sizing and placing stop-loss orders to protect your capital.
Market Conditions: Stay updated with market news and events that could affect the currency pair or instrument you are trading.
By following your trading plan and considering these factors, you can potentially capitalize on the breakout and subsequent correction in the price action of the financial instrument you're monitoring.