Massive CAD Short Squeeze As Investors Turn Neutral On

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The Canadian dollar enjoyed a move to the upside, as oil prices recovered and the US dollar came under pressure. What’s next?

Here is their view, courtesy of eFXnews:

Scotiabank FX Strategy Research comments on the latest IMM report (covering up to Tuesday, June 27 and were released Friday, June 30).

In particular, ScotiaFX notes that net CAD shorts tumbled by USD2.5bn this week which is the largest, 1-week positioning shift in the CAD’s favor since 2014.

“This looks to us to be an overdue reaction to the CAD’s rebound that got underway in early May. CAD gains have forced gross shorts to throw in the towel (and enticed some modest increase of gross CAD longs),” ScotiaFX adds.

Elsewhere, ScotiaFX notes that EUR bulls were active, increasing longs while shorts covered; on the net, EUR longs rose by a little more than USD2bn in the week.

Overall, ScotiaFX notes that in aggregate, the speculative community has gone all but neutral on the USD, reflecting the more constructive messaging on rates from central bankers outside of the US.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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