Canadian Dollar Forecast to Decline

ssi_usd-cad_1_body_Picture_11.png, Canadian Dollar Forecast to Decline

The majority of retail traders remain long the US Dollar (ticker: USDOLLAR) against the Canadian Dollar, but an important shift in crowd sentiment led our “Tidal Shift” strategy to go long USDCAD from C$.9700.

There are currently 2.15 retail traders long the USDCAD for every one that is short, but that ratio represents a significant moderation from last week. Long interest has dropped 21 percent while short positions more than doubled at +103 percent.

We don’t often advocate joining the crowd as they remain aggressively net-long a given currency pair, but the sharp shift in sentiment serves as important warning of a potential USDCAD bottom.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9268-0.0019-0.21%
    AUDUSD=X
    0.5519-0.0016-0.29%
    AUDGBP=X
    0.6704-0.0017-0.25%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg