USDCAD Trade Setup – 29.9.25

USDCAD Trade Setup – 29.9.25 We think USD/CAD is offering a clean trend-continuation long after a multi-week staircase higher built on policy divergence, soft Canadian growth momentum, and subdued crude. The BoC’s recent cut and guidance that further easing is possible keeps the front end in Canada heavier than in the U.S., while domestic activity data have been choppy at best—an unfriendly backdrop for CAD when oil is stuck in the mid-60s. That macro mix supports buy-the-dip behavior so long as price holds above the most recent breakout shelf. Technically, the pair is respecting a rising structure from the mid-1.36s with higher lows above 1.3820 – 1.3850 and a series of bull flags that keep squeezing topside liquidity. The immediate battle lines are 1.3880 – 1.3910 (ideal dip zone) and 1.3980/1.4000 (breakout/psychological magnet). Above that, air pockets toward 1.4050/1.4150 come into play. From a sentiment/positioning angle, specs remain net short CAD and dealers tend to carry gamma and stops clustered just above 1.40, a recipe for impulsive extensions if resistance gives way. Put together, USD/CAD remains a high-quality long while price holds the base and the fundamental skew (BoC easing bias & soft oil prices) persist. USDCAD Trade Setup: Pair / Asset Bias & Entries Stop / Invalidation Targets Why A+ (fundamentals, technicals, sentiment/positioning) Near-term catalysts (UK time) USD/CAD 1.3942 Long on dips 1.3880 –1.3910; add on >1.3980. 1.3830 1.4050 – 1.4150 BoC cut to 2.50% and is open to more—policy divergence vs the Fed is narrower but still CAD-negative into soft domestic trend. July GDP +0.2% was a blip; August now-cast flat, and CAD just posted its largest weekly drop since Feb even with GDP beat. Oil is subdued in mid-60s. IMM shows CAD still net short. Technically, price holds above prior range top with shallow pullbacks, momentum supports trend continuation.  Tue 15:00 US JOLTS; Wed 15:00 ISM Mfg; Fri 13:30 US NFP. (Canada LFS is Oct 10, not this week.)    USDCAD Trade Setup – 29.9.25 Conclusion: We think our USDCAD trade setup is an A+ long because the three pillars align: Fundamentals: BoC easing bias vs. a U.S. policy path that, while softer than mid-year, is less dovish than Canada’s, with crude not providing its usual CAD tailwind. Technicals: Well-defined structure, buy 1.3880–1.3910, add on a decisive break >1.3980/1.4000; trend remains intact while above 1.3830 – 1.3850. Sentiment/Positioning: Ongoing net-short CAD exposure and stop/gamma pockets near 1.40 can accelerate upside once triggered. Execution summary Plan: Scale in on dips 1.3880 – 1.3910 – add on >1.3980/1.4000 confirmation. Risk: Hard stop 1.3830 (or thesis invalidation on a daily close <1.3810). Targets: 1.4050 (TP1) to de-risk and trail; 1.4150 (TP2) if momentum persists. Trade management: After TP1, trail to entry or last higher low and let any 1.40 break do the heavy lifting. What would downgrade the setup A sharp oil rebound (supply shock, surprise OPEC+ action) that lifts CAD beta. A string of Canadian upside surprises that walk back BoC-easing expectations. A failed breakout >1.3980/1.4000 followed by a daily close below 1.3810, that would signal distribution and put the uptrend on hold. Bottom line: As long as the pair holds the rising base and macro tailwinds don’t flip, buy-the-dip with a breakout add offers attractive asymmetry toward 1.4050/1.4150, with tight, objective risk beneath the structure. For similar Forex Trade Signals please visit our forex trade ideas page. Please visit our Disclaimer page. Disclaimer Information on these pages contains forward-looking statements that involve risks and uncertainties. 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