CAD/CHF 4H Reversal Setup – Stoch RSI Signals Exhaustion

CAD/CHF 4H Reversal Setup – Stoch RSI Signals Exhaustion 📉📈

Pair: CAD/CHF
Timeframe: 4H
Date: July 3, 2025

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Market Overview

The CAD/CHF pair remains in a strong downtrend. Price is trading below both the 50 EMA and 200 MA, which are sloping downward. This confirms bearish momentum. After a small bullish bounce, the pair is testing the dynamic resistance zone formed by the 50 EMA.

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Indicator Confluence

• Stochastic RSI (3,3,14) is deep in the overbought zone (above 94), suggesting bullish momentum may be fading.
  
• Price has failed to break above the 50 EMA (0.58564), which could serve as a resistance barrier.
  
• EMA and MA crossover shows 50 EMA remains below the 200 MA, confirming the dominant trend is bearish.
  

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Trade Idea: Short Setup

Entry Zone: 0.58240 – 0.58300 (wait for bearish confirmation candle)
Stop Loss: Above 0.58600 (just beyond the 50 EMA)
Take Profit Targets:

• TP1: 0.57200 (recent swing low)
  
• TP2: 0.56000 (next support zone)
  

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Strategy Logic

This is a trend-continuation reversal entry, catching the top of a pullback within a bearish structure. The Stochastic RSI overbought condition, combined with resistance at the 50 EMA and overall trend alignment, makes this setup attractive for swing or intraday short trades.

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Risk Disclaimer
This idea is for educational purposes only. Always apply proper risk management and confirm setups with your trading plan.

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