FXStreet (Bali) - As Shaun Osborne, Chief FX Strategis at Scotia Bank notes, CAD sentiment improved materially last week, with the net short CAD position narrowing $1.0bn to $3.7bn following the BoC’s Jan 20 policy hold. Key Quotes The aggregate USD long position has fallen to a fresh multimonth low, dropping $5.4bn w/w to $20.9bn (top right p1) at levels last seen in late October. This week’s changes were largely driven by a moderation in bearish sentiment toward CAD and EUR, offset somewhat by a decline in the JPY net long. All three changes are likely the result of shifting central bank policy risks as the position date incorporates both the Fed and BoJ meetings as well as public appearances from the Fed’s Fischer and ECB’s Draghi. CAD sentiment improved materially, the net short CAD position narrowing $1.0bn to $3.7bn in a somewhat belated response to the BoC’s Jan 20 policy hold. Details include an overall paring of risk, as we note a decline in both long and short positions (bottom right p1)—suggesting uncertainty rather than confidence in the near term path for CAD. The net short EUR position narrowed a remarkable $5.4bn to $11.9bn at levels last seen in mid-October (top right p2). The position has narrowed nearly $12.5bn from the pre-ECB levels from early December with a nearly unbroken liquidation of shorts over the past 9 weeks. Rising confidence among bulls is also noted, with a three-week run of rising gross longs (middle right p2). JPY sentiment deteriorated for the first week in six, with a $1.4bn narrowing in the net long to $3.9bn. Subsequent movement in JPY would suggest a reversal of this week’s changes For more information, read our latest forex news.