Canadian Dollar Forecast to Rally
Retail forex trading crowds have bought aggressively into US Dollar (ticker: USDOLLAR) declines against the Canadian Dollar. The build in long positions gives us a contrarian bearish bias and keeps us focused on further USDCAD declines. In fact, total long interest rose 18 percent overnight and shorts fell by a similar 13 percent.
Extremely one-sided sentiment warns that the USDCAD may fall further through short-term trading. Focus remains on key USDCAD lows as a break below could accelerate US Dollar losses and Canadian Dollar gains.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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