The Canadian dollar is about as hated as it has been in two years, with professionals all betting it keeps falling. But when absolutely everyone expects something bad, the bar for a surprise is very low — any hint of a trade deal resolution or a pickup in
The Canadian dollar is about as hated as it has been in two years, with professionals all betting it keeps falling. But when absolutely everyone expects something bad, the bar for a surprise is very low — any hint of a trade deal resolution or a pickup in commodity demand could catch the crowd off guard. Rather than piling into the same bet as the hedge funds, a contrarian player can position for a short squeeze where the Canadian dollar snaps back. Even a small piece of good news could force short-sellers to buy back in a hurry, pushing the currency higher.
Idea
The Canadian dollar is about as hated as it has been in two years, with professionals all betting it keeps falling. But when absolutely everyone expects something bad, the bar for a surprise is very low — any hint of a trade deal resolution or a pickup in commodity demand could catch the crowd off guard. Rather than piling into the same bet as the hedge funds, a contrarian player can position for a short squeeze where the Canadian dollar snaps back. Even a small piece of good news could force short-sellers to buy back in a hurry, pushing the currency higher.
Advanced analysis — institutional-depth research report
Is the Canadian dollar one Bollinger Band fraction away from triggering this contrarian squeeze setup?