Posts
Author: Lubosi Maboshe
Posted on: July 3, 2025
Category: Forex Strategy & Market Setups
In my last post on the CAD/CHF reversal, I showed how Stoch RSI helped spot a short opportunity. You can read it here.
Introduction
In today’s 4-hour analysis of the EUR/CAD currency pair, we uncover a classic trend continuation setup supported by both price structure and oscillator signals. This kind of setup is a favorite among professional traders because it combines momentum, market psychology, and technical precision.
If you’re a trader looking for clarity during pullbacks, this strategy offers a high-probability entry based on simple but effective tools: EMA crossover, Stochastic RSI, and clean candlestick behavior.
Market Structure: A Textbook Uptrend
The EUR/CAD pair has shown exceptional strength over the last few weeks. The current 4-hour chart reveals a clear higher high, higher low structure, with price comfortably trading above both the 50 EMA and 200 EMA.
This isn’t just noise. It’s a strong institutional trend fueled by euro strength and CAD weakness — possibly linked to recent oil weakness or shifts in eurozone inflation sentiment.
The market is currently undergoing a natural pullback — and this pullback may be offering savvy traders a prime entry opportunity.
Indicator Confirmation: Stochastic RSI Resetting
Let’s dig into the Stochastic RSI, set at (3, 3, 14, 14), a powerful tool to detect momentum reversals within trends.
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The oscillator has dipped into oversold territory, with values at 0.44 and 0.29.
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In the context of a strong uptrend, this suggests a healthy pause, not a reversal — meaning the market is likely reloading before its next upward move.
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Traders often refer to this behavior as a “reset within a trend” — a critical moment when fear shakes out weak hands and invites disciplined entries.
Dynamic Support Holding Firm
The 50 EMA, currently near 1.59792, is acting as dynamic support, catching price dips and rejecting strong bearish moves. Below that, the 200 EMA sits at 1.57965, further confirming a deep support zone.
This kind of dual-EMA structure is a hallmark of trend strength. Price sitting above both with clean spacing means the trend is still maturing and has more room to go.
Trade Setup: Buying the Pullback
If you’re planning an entry, here’s a simple, structured idea:
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Entry Zone: Between 1.59800 and 1.60000, once a bullish candlestick confirms support (look for pin bars or engulfing candles).
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Stop Loss: Below 1.59500 (under swing low and below the 50 EMA to allow breathing space).
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Take Profit Levels:
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TP1: 1.61000 (recent swing high)
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TP2: 1.61800 (next Fibonacci extension and psychological round number)
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This trade idea supports a 1:2 or 1:3 reward-to-risk ratio, depending on your exit management — ideal for both intraday and short-swing traders.
Why This Trade Matters
Many traders struggle with knowing when to enter a trend after they “miss the move.” This is where understanding pullbacks becomes a skill edge.
Instead of chasing highs, this strategy teaches patience — wait for the crowd to panic on a dip, then ride the institutional wave.
This setup works not because of magic indicators, but because it respects market rhythm and trend psychology.
You’re not fighting the market. You’re listening to it.
Educational Takeaway
If you’re learning how to trade trends, study this EUR/CAD 4H chart. Here’s what to take away:
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Let price lead, not indicators.
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Look for alignment between EMAs and oscillator resets.
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Enter at key zones — not at the top, not too early.
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Be patient. The best setups are the ones that make sense even to the eye.
Trading is not about being perfect. It’s about consistency, discipline, and only acting when the odds are in your favor.
Risk Disclaimer
This analysis is shared for educational purposes only and does not constitute financial advice. Always use risk management, protect your capital, and never trade with money you cannot afford to lose.
Past performance does not guarantee future results.
Final Thoughts
The EUR/CAD chart is offering more than a setup — it’s offering a lesson in trading discipline.
With the right entry signal near support and the current structure holding, this pair has the potential to deliver a clean continuation toward 1.6100 and possibly beyond.
Watch for confirmation. Respect your plan. Trade smart.
Have you traded EUR/CAD recently? Do you see the same opportunity forming?
Share your thoughts in the comments below — I’d love to hear your setups and ideas.
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