USD/CAD drops as oil hedge funds cut bullish bets to 17-year lows

USD/CAD declined 0.4% to 1.3650 as hedge funds slashed their crude oil long positions to the lowest level since October 2008, with net-long WTI futures positions falling by 19,578 lots to just 29,686. The dramatic reduction in bullish oil bets reflects easing concerns over Russian sanctions and growing oversupply fears, which paradoxically strengthened the Canadian dollar despite lower oil prices. Market positioning data from CFTC reveals extreme bearish sentiment in the energy sector, with several agencies forecasting oil supply to outstrip demand in coming months. The loonie found additional support from stable domestic economic conditions and expectations that the Bank of Canada may pause its easing cycle. Technical indicators show USD/CAD testing support at 1.3640, with a break below potentially targeting 1.3600. Traders should monitor upcoming Canadian GDP data and OPEC+ production decisions for further directional cues.