USDCAD Traders long at a 21 ratio eyeing a continuation toward 12800
Our internal data shows that our traders are betting heavily on continued gains in USD/CAD, with 67% of open positions on the long side.
Share this:
Traders are understandably on edge given the situation in Afghanistan heading into a new week, and that general unease is reflected in the forex market, where the “safe haven” triumvirate of the Japanese yen, Swiss franc, and US dollar are the strongest major currencies while the more risk-sensitive commodity dollars (the Australian, New Zealand, and Canadian dollars) are the three weakest majors.
Among those currencies, the pairing that may be the most interesting this week is USD/CAD. Our internal data shows that StoneX retail traders are betting heavily on continued gains in the unit, with 67% of open positions on the long side. While positioning extremes can occasionally present contrarian opportunities to “bet against the crowd”, traders more often tend to follow (and in so doing, extend) budding trends as we’re seeing in USD/CAD today.
Looking at the chart, the pair formed a “rounded bottom” pattern through May and June, marking its low for the year so far, and is now finding support at its rising 50-day exponential moving average (EMA). Rates briefly spiked above the 200-day EMA all the way up to test 1.2800 in late July, but since then have bounced between the 50- and 200-day EMAs:
Source: TradingView, StoneX
With traders adding to their bullish positions and prices trending higher in the short term, a break back above the 200-day EMA at 1.2600 could prompt bulls to target the multi-month high near 1.2800 later this month. Meanwhile, it would likely take a break below the 50-day EMA to cause bullish traders to close their positions and flip the near-term bias in favor of the bears.
Finally, it’s worth noting that the North American pairing is in for a big week from a fundamental perspective. Tomorrow brings US retail sales and industrial production data, as well as a speech from
FOMC Chairman Jerome Powell, followed by UK CPI and the FOMC minutes on Wednesday. To close the week, USD/CAD traders will keep a close eye on the Philly Fed Manufacturing index and US initial jobless claims on Thursday, with Friday’s UK retail sales report putting a bow on a busy week.
How to trade with City Index
Follow these easy steps to start trading with City Index today:
- Open a City Index account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Traders are understandably on edge given the situation in Afghanistan heading into a new week, and that general unease is reflected in the forex market, where the “safe haven” triumvirate of the Japanese yen, Swiss franc, and US dollar are the strongest major currencies while the more risk-sensitive commodity dollars (the Australian, New Zealand, and Canadian dollars) are the three weakest majors.
Among those currencies, the pairing that may be the most interesting this week is USD/CAD. Our internal data shows that StoneX retail traders are betting heavily on continued gains in the unit, with 67% of open positions on the long side. While positioning extremes can occasionally present contrarian opportunities to “bet against the crowd”, traders more often tend to follow (and in so doing, extend) budding trends as we’re seeing in USD/CAD today.
Looking at the chart, the pair formed a “rounded bottom” pattern through May and June, marking its low for the year so far, and is now finding support at its rising 50-day exponential moving average (EMA). Rates briefly spiked above the 200-day EMA all the way up to test 1.2800 in late July, but since then have bounced between the 50- and 200-day EMAs:
Source: TradingView, StoneX
With traders adding to their bullish positions and prices trending higher in the short term, a break back above the 200-day EMA at 1.2600 could prompt bulls to target the multi-month high near 1.2800 later this month. Meanwhile, it would likely take a break below the 50-day EMA to cause bullish traders to close their positions and flip the near-term bias in favor of the bears.
Finally, it’s worth noting that the North American pairing is in for a big week from a fundamental perspective. Tomorrow brings US retail sales and industrial production data, as well as a speech from FOMC Chairman Jerome Powell, followed by UK CPI and the FOMC minutes on Wednesday. To close the week, USD/CAD traders will keep a close eye on the Philly Fed Manufacturing index and US initial jobless claims on Thursday, with Friday’s UK retail sales report putting a bow on a busy week.
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the pair you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Related tags:
Latest market news
The complete CFD trading experience
Award-winning platforms, competitive spreads, low commissions and dedicated support.
We live and breathe the markets and are dedicated to helping traders realise their ambitions as we continue to set the industry bar.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
EUR/USD, USD/JPY Outlook: Oil, yields and an FX identity crisis
Crude oil is setting the tone across rates and FX, leaving EUR/USD vulnerable and USD/JPY caught between higher Treasury yields and the growing threat of intervention
AUD/USD Analysis: What's Next for the Australian Dollar After the RBA Decision?
Recent trading sessions have reflected a more neutral tone around the Australian dollar. This can be seen in AUD/USD price action, which has posted moves of roughly 0.2% over the last two sessions without establishing a clear direction. Much of this lack of momentum is linked to expectations surrounding the next policy moves from both the Reserve Bank of Australia (RBA) and the Federal Reserve.
Gold forecast: Rising yields become too hot for gold, but the outlook is far from bearish
Gold and silver prices took a plunge today, with the former down 3% and the latter falling some 5% by mid European session, before bouncing off their lows. The losses come after the metals remained largely supported until last week, despite the big dollar rally and surging bond yields as we have seen in recent weeks. But it simply got too much, and the metals succumbed to pressure today.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.