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USDCAD Ready to Collapse? COT Signals a Bearish Storm!

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🔎 1. COT Context – Canadian Dollar (CAD)
Asset Managers: Consistently net short for most of the period, but since January 2025, there's been a strong recovery—net positions have become progressively less negative. By mid-April, they’re still short, but significantly less so.

Leveraged Money: Also heavily short in December 2024, but showing a clear bullish reversal starting in early 2025, with net positions turning increasingly positive on CAD.

✅ Interpretation: There's been a clear sentiment shift from bearish to bullish on CAD starting late 2024. This adds downward pressure on USDCAD.

💵 2. COT Context – US Dollar Index (USD)
Asset Managers: Consistently long, but reducing their net exposure since late March 2025.

Leveraged Money: Opposite of CAD – heavily short in December 2024, now recovering, though without strong momentum. Positions are hovering around neutral.

⚠️ Interpretation: While CAD grows stronger, USD shows signs of indecision or profit-taking. This amplifies the bearish bias on USDCAD.

📉 3. Technical Analysis – USDCAD
Current Price: 1.38369, right near a strong demand zone between 1.3700 – 1.3830, which has already been tested multiple times.

The current weekly candle is forming a doji or pin bar, hinting at a potential technical bounce.

Key Resistance: 1.45215 (monthly high).

Key Support: 1.3700. A breakdown below this could trigger a move toward 1.3480.

RSI: Neutral to slightly bearish, no major divergences observed.

🧠 Technical Outlook:

If the 1.3700–1.3830 zone holds, we might see a corrective bounce toward 1.4000–1.4100.

If that zone breaks, expect a bearish continuation toward 1.3580–1.3480.

📊 Trade Summary
Fundamental Bias (COT): Bearish USDCAD → Strong CAD, weakening USD.

Technical Bias: Neutral to bearish, potential for short-term bounce before continuation.

🧭 Trade Plan
🎯 Short on pullback toward 1.4000–1.4100 with stop above 1.4150, targeting 1.3600–1.3500.
🎯 Breakout trade below 1.3700 → Enter on daily close confirmation, target 1.3480.

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