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USDCAD– Retail FX traders remain heavily short the US Dollar versus the Canadian Dollar, and we maintain our contrarian calls for further USD/CAD gains.
As we’ve highlighted in recent weeks, aggregate positioning is near its most net-short since at least 2011. And the clear caveat remains that such aggressive imbalances often coincides with important turns in price; crowds are often their most net-short at the top.
Of course we first highlighted this possibility nearly a month and 400 USD/CAD pips ago, and we will continue to emphasize that such extremes are only clear in hindsight. It would take a substantive shift in crowd sentiment to change our USD/CAD-bullish trading bias.
See next currency section:AUDUSD - Australian Dollar Forecast Calls for Weakness
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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