Even though it’s psychologically hard to currently buy into a trade like the Canadian dollar—the worst performing major of 2014—Adam Button, editor of ForexLive.com, still likes it and has found way to play by adding on a retracement.
The Canadian dollar was near the top of the FX heap once again on Monday (trailing only AUD), as the market continued to digest the strong retail sales and CPI numbers from Friday.
There are only two trades in the Canadian dollar right now, long, or on the sidelines. Look at CAD/JPY, which is breaking to the highest levels since mid-January.
CAD/JPY Daily
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It’s the same story right across the board. The Canadian dollar is the worst-performing major this year and the CFTC positioning data still shows speculators holding a large net short.
CAD CFTC Net
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It’s psychologically difficult to buy into a trade like the Canadian dollar at the moment but I still like it. One strategy is to buy a bit of CAD/JPY (or sell some EUR/CAD) with a small position and plan to add on a retracement. In CAD/JPY, I like 94.50, in EUR/CAD 1.4670. I see more risk of a bounce in USD/CAD so I like 1.0800.
By Adam Button, Editor, ForexLive.com
