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.
📈 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.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
📈 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.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.