Canadian Dollar Forecast to Break to Highs
USDCAD – Trading crowds remain steadily net-long the US Dollar against the Canadian Dollar. Yet positioning remains roughly unchanged since last week, and it is difficult to claim that an imminent USDCAD breakdown is likely.
The ratio of long to short positions in the USDCAD stands at 1.89 as nearly 65% of traders are long. Yet longs are down 19.9% since last week while shorts are up 6.4%.
It’s important to note that the USDCAD continues to bounce near the psychologically significant C$0.9900 mark and now trades marginally above parity. Yet our SSI shows that traders remain long. We often see that such one-sided pressure comes before the eventual break of important support. Obviously past performance is not indicative of future results, but this author likes the odds of a USDCAD breakdown.
How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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