EUR/CAD Trade Plan (4H Timeframe)
Bias: Bullish
🧠Why Buy EUR/CAD?
Reason Details
COT Data
Institutions are 66.9% long EUR and 80.19% short CAD
Retail Sentiment
87% of retail traders are short (contrarian signal = bullish)
Technical Setup
Breakout + retest of descending trendline and resistance = bullish continuation setup
Technical Analysis Summary
Trend & Price Action
The pair broke out of a descending trendline, indicating a shift from a short-term downtrend to a potential uptrend.
Key Levels
1. Resistance / Take Profit (TP) Target Zone:
Around 1.61500 – 1.62000
Marked in red as the TP TARGET, this is a supply zone.
The market may face selling pressure at this point.
2. Current Price Levels:
Price is trading around 1.6088, slightly below the local resistance at 1.6108.
3. Support / Buy Zone:
Between 1.60701 – 1.60884
This zone has previously acted as resistance and may now serve as support, aligning with the breakout retest.
4. Lower Support Levels:
1.59218 and 1.58883 are marked as potential deeper support if the breakout fails.
Indicators and Patterns
Trendline Breakout: The descending black trendline has been broken, suggesting bullish momentum.
Pivot Levels (R1, R2, S1, etc.) are overlaid, providing additional confirmation of key support/resistance zones.
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Trading Plan (as per the chart)
Bullish Bias: The breakout and retest imply a long entry from the BUY ZONE (1.607 – 1.6088).
TP Target: Around 1.615 – 1.620
Invalidation Level: A break below 1.6070, or especially below 1.5921, may invalidate the setup and turn bias bearish.
COT Data Analysis
EUR (Euro):
Long Positions: 66.9%
Short Positions: 33.1%
Δ Weekly: -1.11% (net longs reduced slightly)
Interpretation:
Institutions are still heavily long on the Euro, showing confidence in its strength.
However, there’s a slight weekly decrease, possibly a bit of profit-taking or caution ahead of upcoming data.
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CAD (Canadian Dollar):
Long Positions: 19.81%
Short Positions: 80.19%
Δ Weekly: +1.22% (shorts increased further)
Interpretation:
Institutions are extremely bearish on the Canadian Dollar.
The increase in short positions shows growing conviction that CAD will weaken.
🧮 Institutional Bias:
Bullish on EUR/CAD: Institutions are net long EUR and net short CAD, meaning they expect EUR/CAD to rise.
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Retail Sentiment (EUR/CAD):
Long: 13%
Short: 87%
Interpretation:
Retail traders are massively short on EUR/CAD.
This is a contrarian signal: retail traders are often on the wrong side of the market.
Smart money likely sees upside if retail is heavily short.
Conclusion
All signals — COT, retail sentiment, and technical structure — point toward a bullish EUR/CAD outlook.
Institutions are buying EUR and shorting CAD, while retail traders are mostly short, potentially fueling a short squeeze if price rallies. Technically, the breakout and retest also support a bullish trade idea.