Smart Money Just Flipped Bearish on USD/CAD. Are You Still Long?

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🧠 1. COT Context & Institutional Flows

🇨🇦 CAD COT Report (CME) – June 10, 2025

Non-Commercials (speculators): net short 93,143 contracts (19,651 long vs. 112,794 short), with a short reduction of -14,319 → early bearish unwinding.
Commercials: net long 91,207 contracts (223,285 long vs. 132,078 short), with strong accumulation (+27,999 longs).

🔄 Net open interest change: +18,436 → renewed institutional interest on the long CAD side.

🇺🇸 USD Index COT Report (ICE) – June 10, 2025

Non-Commercials: net long 1,402 contracts (17,027 long vs. 15,625 short), with a +1,279 increase in longs → modest USD support.
Commercials remain net short -35 contracts, no clear shift.

🔄 Total open interest +2,652 → mild bullish interest in USD.

📌 Implication: Strong institutional support for CAD, USD mildly supported. Net positioning favors downside pressure on USD/CAD.

💹 2. Technical Analysis & Price Action

Primary trend: clearly bearish from the 1.38 zone.
Current price: 1.3552, testing a macro demand zone (1.3470–1.3540).
Daily RSI remains deeply oversold → possible technical bounce, but no reversal structure confirmed.
Recent candles show lower highs and lower lows, with no bullish momentum.

📌 Implication: The bearish trend remains in control. A technical rebound is possible, but bias stays short as long as price trades below 1.3640.

📈 3. Retail Sentiment

77% of retail traders are long USD/CAD, with an average entry at 1.3646.
Only 23% are short, positioned better at 1.3790.
📌 Implication: Retail is heavily long → contrarian bearish signal confirmed.

📊 4. Seasonality

June is historically weak for USD/CAD:
5Y Avg: -0.0118
2Y Avg: -0.0081
The June seasonal curve shows a stronger downside acceleration into the second half of the month.

📌 Implication: Seasonality adds downward pressure into month-end.

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