USD/CAD: The US Dollar in a Trap! Ready for a Rebound?
Technical Overview:
The monthly chart of USD/CAD shows a weakening phase of the US dollar against the Canadian dollar. Currently, the price is located at a key support zone around 1.3800. The RSI suggests a potential technical rebound, but the bearish structure remains intact until the resistance at 1.4000 is broken.
Seasonality:
According to seasonal trend data, the month of May historically shows a slightly positive trend for USD/CAD:
20 years: +0.0017
15 years: -0.0027
10 years: +0.0014
5 years: +0.0039
2 years: -0.0020
This trend highlights a historical short-term weakness (2 years), while over longer periods, the movement is marginally positive.
COT Report:
COT data shows an increase in long positions on the dollar (+2,158 contracts), while short positions also increased (+2,817 contracts). This suggests uncertainty among institutional traders, with a slight inclination towards short positions.
Market Sentiment:
Data indicates that 65% of retail traders are short on USD/CAD, while only 35% are long. This could signal a potential squeeze if the price breaks above resistance levels.
Operational Conclusion:
Considering the bearish pressure and technical structure, a prudent strategy could include:
Long Entry: Above 1.4000 with confirmation on lower timeframes.
Stop Loss: Below 1.3800 to minimize exposure to false breakouts.
Primary Target: 1.4200, then 1.4400.
Alternative Strategy: If the price rejects the 1.4000 resistance, consider shorting towards 1.3700.
The monthly chart of USD/CAD shows a weakening phase of the US dollar against the Canadian dollar. Currently, the price is located at a key support zone around 1.3800. The RSI suggests a potential technical rebound, but the bearish structure remains intact until the resistance at 1.4000 is broken.
Seasonality:
According to seasonal trend data, the month of May historically shows a slightly positive trend for USD/CAD:
20 years: +0.0017
15 years: -0.0027
10 years: +0.0014
5 years: +0.0039
2 years: -0.0020
This trend highlights a historical short-term weakness (2 years), while over longer periods, the movement is marginally positive.
COT Report:
COT data shows an increase in long positions on the dollar (+2,158 contracts), while short positions also increased (+2,817 contracts). This suggests uncertainty among institutional traders, with a slight inclination towards short positions.
Market Sentiment:
Data indicates that 65% of retail traders are short on USD/CAD, while only 35% are long. This could signal a potential squeeze if the price breaks above resistance levels.
Operational Conclusion:
Considering the bearish pressure and technical structure, a prudent strategy could include:
Long Entry: Above 1.4000 with confirmation on lower timeframes.
Stop Loss: Below 1.3800 to minimize exposure to false breakouts.
Primary Target: 1.4200, then 1.4400.
Alternative Strategy: If the price rejects the 1.4000 resistance, consider shorting towards 1.3700.
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📈 Nicola | EdgeTradingJourney
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
📈 Nicola | EdgeTradingJourney
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Documenting my path to $1M in prop capital through real trading, discipline, and analysis.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.