Canadian Dollar Forecast to Strengthen
USDCAD – Trading crowds have turned strongly net-long the US Dollar against the Canadian Dollar, giving us contrarian signal that the pair could continue trading lower. In fact traders have been steadily net-long since the pair crossed below the C$1.0400 mark, and we see little reason to change our bearish bias.
The ratio of long to short positions in the USDCAD stands at 2.44 as nearly 71% of traders are long. Yesterday, the ratio was at 2.26 as 69% of open positions were long. In detail, long positions are 9.4% higher than yesterday and 6.7% weaker since last week. Short positions are 1.4% higher than yesterday and 7.3% weaker since last week.
The fact that crowds are net-long and continue buying gives us a bearish USDCAD trading bias.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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