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.

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.

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.

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.

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