Canadian Dollar Likely to Gain further versus US Dollar
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USDCAD– A substantial shift in retail forex trader positioning warns that the US Dollar may have set an important top versus the Canadian Dollar. Our data shows there are currently 1.3 open retail short positions in the USD/CAD for every one that is long; 43% of traders are long. This represents a notable swing from three weeks ago when that ratio exceeded 4 to 1. And indeed, a sharp turn from such one-sided extremes acts fairly clear warning that the trend has shifted.
The fact that this big turn occurs on the largest USD/CAD decline in five years helps confirm that the pair may indeed continue lower.
See next currency section:AUDUSD - Australian Dollar Forecast to Hit Fresh Peaks
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.