It is worth noting, though, that unlike most commodity futures, where the exchange-traded markets set the global benchmarks, currencies trade primarily outside the purview of the CFTC, and therefore the Commitment of Traders report does not provide a complete picture of how the market is positioned. However, FX dealers are reporting similar trends among their own speculative clients, so the COT data would seem to serve as a reasonable proxy for the underlying market.
The Canadian dollar is now near the low end of the range in which it has traded over the past 18 months, and April is seasonally the Canadian dollar’s strongest month, with the most frequent positive returns and highest average returns. Given the heavily short position of the speculative community, and early reports of those positions being unwound, now would seem an opportune time to enter a new long position in the currency. Buy June Canadian dollar, placing initial stops at 95.50, close only.