USD/CAD Ratio: 1.35 Trading Signal: Bearish
USDCAD – Forex traders continue buying the US dollar against the Canadian dollar, as the ratio of long to short positions in the USDCAD stands at 1.34 to 1. Yet a 25.1 percent overnight jump in short positions suggests that traders are shifting their bias on the USDCAD, and a flip to net-short territory would signal that further USDCAD rallies are in store. Our FXCM Speculative Sentiment index works as a contrarian indicator in trending markets, but it seems as though traders are naturally predisposed to buying the USDCAD and the SSI ratio has remained net positive for a very long time. As such, we give comparatively little weight to the current contrarian signal that we should sell the USDCAD through short-term forex trading.