USD/CAD Daily Edge Report – December 29, 2025
📊 Pair: USD/CAD (Loonie) 📅 Date: December 29, 2025
Current Price and Trend Snapshot 🌍
- Current Level: ~1.3660 (thin holiday liquidity, minor consolidation near recent lows).
- Recent Move: Down sharply in late 2025, with CAD strengthening ~5% YTD amid USD weakness and oil stabilization.
- Key Levels: Support at 1.3600–1.3550; Resistance at 1.3700–1.3750.
- Overall Trend: Bearish on Daily/Weekly (lower highs/lows, breaks below key supports); HTF bias favors CAD strength but holiday chop risks shallow bounces.
Technical Analysis Overview 📈
- Major Levels: Trendline resistance ~1.3750; Imbalance zones near 1.3650–1.3700.
- Potential Setups:
- Setup #1 watch: Liquidity sweep above recent highs → BOS lower → reclaim for shorts.
- Coiled near lows suggests possible Compression → Expansion downside if vol returns.
- Strong Sell signals on indicators; potential for further drop to 1.3550–1.3600.
- Daily: Bearish momentum (below MAs); Weekly: Downtrend from early 2025 highs, targeting lower if sustained.
Retail Sentiment from X/Twitter & Social Media 🐦 Holiday volume low; scattered posts mostly signals/spam, one swing long idea noted but overall quiet. No strong retail extremes—contrarian edge neutral, watch for post-holiday positioning.
Retail Sentiment Table
| Source | % Long | % Short | Extremes/Implications |
|---|---|---|---|
| Myfxbook | ~60% | ~40% | Mildly long → Potential contrarian bearish if aligns with downtrend |
| OANDA/IG/FXSSI | ~50-60% long (aggregated est.) | ~40-50% | Balanced; retail not heavily short → Fade longs on breakdowns |
Professional/Institutional Sentiment 🏦
- Bloomberg/FXStreet/TradingView: Bearish USD/CAD into 2026; targets lower (1.32–1.35) on narrowing differentials and CAD resilience.
- Bank Reports (JPM, Goldman, RBC): Moderately bearish; Fed cuts vs. BoC pause supports Loonie, oil/commodity flows add tailwind. Implications: Specs reducing USD longs, potential adds to CAD.
Most Recent COT Report 📊 Latest (mid-Dec 2025, as of Dec 9-16 data): Specs (non-commercial) reducing net-shorts on CAD modestly/building longs amid USD weakness; weekly changes show shifting bullish CAD bets—implies downside pressure on USD/CAD if trend continues.
Fundamental Drivers 💼
- Ongoing Themes: Policy divergence narrowing (Fed easing cycle vs. BoC hold at ~2.25%); oil prices supportive for CAD despite volatility; USD broad softness post-cuts.
- Upcoming Events (Dec 29): No high-impact red news—extended holiday thin liquidity; year-end flows/squaring possible. Expected reaction: Low vol, range-bound with risk-off tilt potential (bearish USD/CAD).
Overall Market Bias and Trading Ideas ⚖️ Synthesize: Bearish HTF bias (structure breaks + divergence + institutional targets + no extreme retail shorts = asymmetry lower). Fundamentals favor CAD into 2026, but thin vol risks noise/bounces.
Potential Setups (H4/Daily Only):
- A-Setup (Liquidity Sweep → BOS → Reclaim): Sweep above 1.3700–1.3720 → clean retest → short targeting 1.3600–1.3550 (RR 1:6+). Stop above recent high.
- Risk: Holiday fakeouts; wait London/NY for confirmation—no force.
- Aligns with fading retail longs if structure confirms; small risk on chop, perfection on clean liquidity grabs.
Calm patience—market comes to us. Asymmetry in bears here, eyes on 2026 shift.