Canadian Dollar Sentiment Warns of Turnaround
USDCAD – Currency trading crowds have remained net-long the US Dollar against the Canadian Dollar since the pair traded near 1.05, but the first flip to net-short since September, 2010 gives strong contrarian signal that the pair may have bottomed. The ratio of long to short positions in the USDCAD stands at 1.01 as traders are effectively neutral. Yet this is a strong departure from yesterday when the ratio was at 2.07 as 67% of open positions were long.
In detail, long positions are 5.8% lower than yesterday and 1.2% weaker since last week. Short positions are a massive 91.8% higher than yesterday and 96.2% stronger since last week. Open interest is 26.0% stronger than yesterday and 3.6% below its monthly average. The surge in short positions and the first flip to net-short in nearly 9 months warns that the USDCAD may have set an important bottom through recent trade.
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