Canadian Dollar Forecast Unclear
USDCAD – Trading crowds remain quite indecisive on the US Dollar/Canadian Dollar currency pair, giving mixed signals and telling us that the USDCAD may do little other than consolidate into the final trading days of 2011.
The ratio of long to short positions in the USDCAD stands at 1.32 as nearly 57% of traders are long. Yesterday, the ratio was at 2.08 as 68% of open positions were long. In detail, long positions are 21.9% lower than yesterday and 11.7% weaker since last week. Short positions are 23.4% higher than yesterday and 25.2% stronger since last week. Open interest is 7.2% weaker than yesterday and 4.9% below its monthly average.
The fact that crowds are net-long gives us a modestly bearish bias. Yet the sharp overnight shift towards USDCAD selling moderates our sentiment-driven forecast.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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