{"id":38698,"date":"2017-03-26T21:27:42","date_gmt":"2017-03-27T04:27:42","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=38698"},"modified":"2017-03-26T21:28:19","modified_gmt":"2017-03-27T04:28:19","slug":"forex-critical-speculators-flip-script-on-canadian-dollar","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2017\/03\/26\/forex-critical-speculators-flip-script-on-canadian-dollar\/","title":{"rendered":"Forex Critical: Speculators Flip the Script on the Canadian Dollar"},"content":{"rendered":"

Just three weeks ago, speculators sent their bullishness on the Canadian dollar to a 4-year high<\/a>. I followed along with the speculators and accumulated a short USD\/CAD position. Two weeks passed before the payoff. It arrived in the form of an anti-dollar reaction to a rate hike from the U.S. Federal Reserve<\/a>.<\/p>\n


\n
\"The<\/a>
The U.S. dollar is still in breakout mode against the Canadian dollar but the USD\/CAD post-Fed sell-off may have capped the breakout.<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center> <\/p>\n

With USD\/CAD seemingly ready to retest support at its 200-day moving average (DMA), speculators flipped the script to net bearish on the Canadian dollar (FXC).<\/p>\n


\n
\"Speculators<\/a>
Speculators abruptly switch to net short from net long on the Canadian dollar (FXC).<\/figcaption><\/figure>
\nSource: Oanda’s CFTC’s Commitments of Traders<\/a><\/strong>
\n<\/center><\/p>\n

I do not have a ready catalyst to explain the sudden change in heart except to say that I think the post-Fed sell-off in the U.S. dollar was way overdone and the dovish Bank of Canada should be the dominant trading themes for USD\/CAD. Given my stubborn outlook on the U.S. and Canadian dollars, I was quick to start buying USD\/CAD upon seeing the speculator change in heart.<\/p>\n

The one caveat to the switch in sentiment is in the open interest. Note how open interest fell to a 5-week low. This drop likely indicates that the switch in sentiment largely occurred from bulls closing out contracts rather than bears loading up. Regardless, like the last USD\/CAD trade, I will be accumulating a (long) position with the assumption that a pay-off sits not too far off in the future. I will re-evaluate the position if USD\/CAD closes significantly below its 50 and 200 DMAs.<\/p>\n

Be careful out there!<\/p>\n

Full disclosure: long USD\/CAD<\/p>\n","protected":false},"excerpt":{"rendered":"

Just three weeks ago, speculators sent their bullishness on the Canadian dollar to a 4-year high. I followed along with the speculators and accumulated a short USD\/CAD position. Two weeks passed before the payoff. It arrived in the form of an anti-dollar reaction to a rate hike from the U.S. Federal Reserve. Source: FreeStockCharts.com With … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[235,20,511,62],"tags":[296,1688,1513,297,469],"class_list":["post-38698","post","type-post","status-publish","format-standard","hentry","category-canada","category-forex","category-support","category-technical-analysis","tag-canadian-dollar","tag-cftc","tag-commitment-of-traders","tag-fxc","tag-usdcad"],"yoast_head":"\nForex Critical: Speculators Flip the Script on the Canadian Dollar - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2017\/03\/26\/forex-critical-speculators-flip-script-on-canadian-dollar\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Forex Critical: Speculators Flip the Script on the Canadian Dollar - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"Just three weeks ago, speculators sent their bullishness on the Canadian dollar to a 4-year high. 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