US Dollar in Position to Gain versus Canadian Dollar
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USDCAD–The majority of retail forex traders recently turned net-short the US Dollar versus the Canadian Dollar, and a contrarian view of crowd sentiment leaves us in favor of further USD/CAD gains. Indeed we saw a similar dynamic as the pair rallied from C$1.20 in May; traders remained short with little interruption until the most recent turn lower from C$1.3400.
The notable shift in sentiment warns that the USD/CAD may resume its much broader uptrend.
See next currency section: AUDUSD - Australian Dollar Likely to Fall Further
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.