Canadian Dollar Forecast to hit Fresh Highs
USDCAD – Trading crowds remain steadily net-long the US Dollar against the Canadian Dollar, giving consistent signal that the pair could trade lower. The fact that the USDCAD has broken steadily below C$0.9900 is significant, and we like the Canadian Dollar’s chances at further strength.
Our SSI ratio stands at a significant 4.03 as approximately 80% of traders in our sample are long. Clearly, sentiment remains one-sided. Long positions have surged 48% since last week, while short interest is down 26% through the same stretch.
The only variable that really matters in trading is time. Is it the proper time to get short the USDCAD? It is difficult to tell, but current market sentiment and the technical picture tell us that the Canadian Dollar is likely to see fresh highs versus its US namesake. We would sell any important bounces as the USDCAD seems likely to hit fresh lows.
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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