Canadian Dollar May Offer Selling Opportunity at Range Lows
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USDCAD– A notable shift in retail FX trader positioning suggests that the Canadian Dollar will remain in a broad range versus the US Dollar. Last week we were admittedly caught on the wrong side as our retail sentiment data pointed to USD/CAD strength. Yet the pair has done much the opposite, and our trader sample shows positioning is roughly neutral.
Our Speculative Sentiment Index data shows that 56 percent of open positions are currently short the USD/CAD, and a contrarian view of crowd sentiment leaves us with a modestly bullish trading bias. Yet we would need to see a much larger turn towards crowd selling to call for a stronger rally. And indeed, near-neutral positioning suggests that the pair may instead stick to a narrow range through near-term trading.
See next currency section: XAUUSD - Gold Prices Forecast to hit Further Highs
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.