Why Traders See Similar GBPUSD and USDCAD Pictures So Differently
• Both Cable and USDCAD are in similar technical positions
• USDCAD has marked an incredibly consistent climb recently to press multi-year highs with volume soaring
• GBPUSD in contrast has dropped aggressively to multi-year lows, but its turnover remains surprisingly tepid
See how retail traders are positioning in the majors in your charts using the FXCM SSI snapshot.
Two pairs have seen exceptionally consistent runs and push to multi-year extremes. Shouldn't they both be treated by the speculative ranks the same? That doesn't seem to be the case with USDCAD and GBPUSD. Both pairs have pressed extraordinary moves. Cable has tumbled to 5.5-year lows and recently has been under intense selling pressure with consistent declines - particular on the 1.4500 break earlier this week. USDCAD drove to 12-year highs with a 8 consecutive day advance (matching the longest run in decade). Yet, volume has swelled in USDCAD yet backed off for GBPUSD. Positioning has also grown more extreme according to SSI for the former and tempered with the latter. What's different? Do speculative traders just like picking tops rather than bottoms, or is the influence of a bigger fundamental theme (Canada's connection to oil) adding leverage? We discuss this in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.