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Canadian Dollar Forecast to Decline

Canadian Dollar Forecast to Decline

David Rodriguez, Head of Product

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ssi_usd-cad_1_body_Picture_11.png, Canadian Dollar Forecast to Decline

The majority of retail traders remain long the US Dollar (ticker: USDOLLAR) against the Canadian Dollar, but an important shift in crowd sentiment led our “Tidal Shift” strategy to go long USDCAD from C$.9700.

There are currently 2.15 retail traders long the USDCAD for every one that is short, but that ratio represents a significant moderation from last week. Long interest has dropped 21 percent while short positions more than doubled at +103 percent.

We don’t often advocate joining the crowd as they remain aggressively net-long a given currency pair, but the sharp shift in sentiment serves as important warning of a potential USDCAD bottom.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, send a message with subject line “Distribution List” to drodriguez@dailyfx.com;

Contact David via

Twitter at http://www.twitter.com/DRodriguezFX

Facebook at http://www.Facebook.com/DRodriguezFX

Meet the DailyFX team in Las Vegas at the annual FXCM Traders Expo, November 2-4, 2012 at the Rio All Suite Hotel & Casino. For additional information regarding the schedule, workshops and accommodations, visit the FXCM Trading Expo website.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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