USD/CAD sentiment flips from long to short near 1.3450
Midway through the trading week, we update Client Sentiment levels - percentage of IG clients with long or short positions - for major forex pairs like EUR/USD, USD/JPY, and more. Find out what traders are thinking this week.
Forex sentiment update
Action in US dollar pairs continues ahead of US inflation data tomorrow. Higher-than-expected inflation could signal further strength for USD while a reading below expectations may move markets against the dollar.
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USD/CAD is trading above 1.3400 this week for the first time since the beginning of June. 12% more traders believe the pair will revert lower than last week as a result.
USD/CAD historical prices
How client sentiment works
Client Sentiment shows the percentage of IG client accounts with open positions that are currently long or short. If the majority of client accounts with open positions are long a given market, then they expect the price to rise; if the majority is short, then they expect it to fall. (Values taken using IG's Client Sentiment measure as of the previous day's close.)
Trend followers might go with sentiment, while contrarians would tend to go against the trend. For example, a 65% long measure in EUR/USD could reflect a buying opportunity for trend followers or a selling opportunity for contrarians.
EUR/USD sentiment - 53% long
Last week's sentiment: 56% long
Euro sentiment approaches 50/50 as traders are split on the future of EUR/USD. The pair ended last week above 1.1000, but has spent this week slightly below.
GBP/USD sentiment - 55% long
Last week's sentiment: 58% long
British pound sentiment remains long as GBP continues to trade below 1.2800 - over 350 pips down from July's highs.
USD/JPY sentiment - 69% short
Last week's sentiment: 70% short
Slightly fewer traders are short USD/JPY despite another rally this week. The pair opened under 142.00 on Sunday and is trading above 143.50 midday Wednesday.
USD/CHF sentiment - 79% long
Last week's sentiment: 82% long
Swiss franc sentiment remains relatively unchanged from last week as USD/CHF continues to trade around 0.8760. Over three out of four traders still believe USD can gain on CHF.
AUD/USD sentiment - 80% long
Last week's sentiment: 81% long
Last week's fall in AUD/USD has proved persistent as the pair continues to trade below 0.6600. Four out of five traders anticipate a reversion to the long-term mean.
USD/CAD sentiment - 58% short
Last week's sentiment: 54% long
58% of traders are now short the North American pair after a rally toward USD. USD/CAD is up over 200 pips from last Wednesday's open ahead of US inflation data.
How to trade client sentiment
- Open an account to get started, or practice on a demo account
- Choose your forex trading platform
- Open, monitor, and close positions on forex pairs
Trading forex markets using client sentiment requires an account with a forex provider like IG. Many traders watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on client sentiment. Contrarians might go against the prevailing sentiment in a forex pair, while trend followers might go with it.
You can help develop your forex trading strategies using resources like IG’s Trading Academy. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.
Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.
This information has been prepared by IG, a trading name of IG US LLC. This material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. You should not treat any opinion expressed in this material as a specific inducement to make any investment or follow any strategy, but only as an expression of opinion. This material does not consider your investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. No representation or warranty is given as to the accuracy or completeness of the above information. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. See our Summary Conflicts Policy, available on our website.
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