The Canadian dollar's exchange with the U.S. dollar reached a high of $.72073 CAD/USD on April 13 and then another high of $.72097 CAD/USD on April 30. Both times, these moves struggled with the 38.2% retracement of the move from the Dec. 31 high to March 18 low, calculated at $.71814 CAD/USD. At the most recent high on April 30, resistance at the contract's 50-day moving average was also tested.
This week's move has seen a drop below the contract's 20-day moving average (blue line), while also a drop below trendline support drawn from the March low (upward-sloping blue line.) The May 6 low found support at the 38.2% retracement of the move from the March low to April high at $.7073 CAD/USD, while a move below this would open the door to a further slide to $.70308, the 50% retracement line and April lows slightly below this level.
The lower study shows CFTC data as of April 28 showing investors holding the largest bearish position seen in five weeks at a net-short futures position of 29,044 contracts. This is just short of testing the March 24 position of 29,245 contracts net short. Should the current net-short position grow larger than the March 24, it would result in the largest bearish position seen since June 2019 or in almost one year.
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