USD/CAD Ratio: 1.59 Signal: Bearish
USDCAD – The USDCAD has finally found some direction and seen a dramatic jump in underlying volatility. The upside direction has in turn worked to depress the SSI’s reading to its lowest overall reading in months. The pair’s 1.59 ratio compares to the 2.19 reading from last week, which is consistent with the significant reduction in positioning volatility since October and may in turn point to a potential flip in the near future. Open interest was only 1.4% weaker than Wednesday and 14.1% below the monthly average. Long positions edged 0.8% higher than yesterday and a significant 23.1% weaker than last week. Short positions were 4.7% lower than Wednesday and 8.2% stronger than the week before. The SSI is a contrarian indicator and therefore points to further USDCAD losses; but we will watch for the flip soon.