Analysis of market sentiments:
- Traders’ confidence rises, benefiting from riskier assets such as US equities, but undermining security like the US dollar.
- However, there has been a leap in new long positions USD / CAD, recommending Canadian dollar is out of favor.
Traders’ confidence is growing
Traders are increasingly choosing risky assets at the expense of safe havens, despite EU restrictions on US travelers, the withdrawal of Western countries from Afghanistan, hurricane-stricken Louisiana and disappointing economic data from China and Japan.
The US dollar shelter has been particularly hard hit, perhaps because Federal Reserve Chairman Jerome Powell was suddenly stupid last week when he spoke at a virtual Jackson Hole summit. However, retailers have created significant long positions USD/ CAD over the past week, suggesting that the Canadian dollar is even more at a disadvantage.
USD / CAD price chart, daily schedule (April 16 – August 31, 2021)
Chart IG (Click for larger image)
IG customer sentiment data show 73.89% retail trade traders are long-term, the ratio of long to short traders is 2.83-1. The number of traders in net length does not change from yesterday but 28.03% higher if lweek, while the number of traders is short, does not change from yesterday but 37.52% lower if Last week.
Here at DailyFX, wThe mood of the crowd is usually controversial and the fact that the net length of traders indicates that USD / CAD prices may continue to fall.
Positioning is less network length than yesterday, but more than last week. The combination of the current mood and recent changes gives us mixed USD / CAD trading prejudices.
In this webinar I as well looked at trends in key currency, commodity and stock markets, forward-looking data economic calendar this week, at IG customer mood page of DailyFX websiteand at IG customer feel reports accompanying it.
– Written by Martin Essex, analyst
Feel free to contact me on Twitter @MartinSEssex