The USDCAD
USD/CAD
The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh most traded currency. The United States and Canada are geographical neighbors, and as a result there is a lot of trade between the two countries. Thus, there is often decent volatility and low spreads for the USD/CAD, typically between 1 and 3 pips on most foreign exchange brokers. Factors Influencing the USD/CADThere are a number of important economic or news releases that can affect the USD/CAD. This includes among others, Non-Farm Payroll data for the US that are released on the first Friday of each month. Such metrics tell us whether employment is rising or falling, while the Gross Domestic Product (GDP) for Canada or the US, measure the total value of all goods and services produced by the country. In addition, the USD/CAD is known as a “Commodity Pair”, as Canada possesses large amounts of natural resources, specifically oil, which is its most traded commodity. As a result, it’s important for long term speculators of USD/CAD to keep a close eye on crude oil developments due to the strong negative correlation.
The USD/CAD is the currency pair encompassing the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The pair’s exchange rate indicates how many Canadian dollars are needed in order to purchase one US dollar. For example, when the USD/CAD is trading at 1.3500, it means 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the world’s most traded currency, whilst the Canadian dollar (CAD) is the world’s seventh most traded currency. The United States and Canada are geographical neighbors, and as a result there is a lot of trade between the two countries. Thus, there is often decent volatility and low spreads for the USD/CAD, typically between 1 and 3 pips on most foreign exchange brokers. Factors Influencing the USD/CADThere are a number of important economic or news releases that can affect the USD/CAD. This includes among others, Non-Farm Payroll data for the US that are released on the first Friday of each month. Such metrics tell us whether employment is rising or falling, while the Gross Domestic Product (GDP) for Canada or the US, measure the total value of all goods and services produced by the country. In addition, the USD/CAD is known as a “Commodity Pair”, as Canada possesses large amounts of natural resources, specifically oil, which is its most traded commodity. As a result, it’s important for long term speculators of USD/CAD to keep a close eye on crude oil developments due to the strong negative correlation. Read this Term finally made a run to the downside and away from the RED BOX that and confined the pair going back to September 27 (see chart above).
The pair waffled above and below the low of that red box over 3 trading days until breaking to the downside yesterday. The low price for the day reached a somewhat modest target at 1.34078 area. The level represented a swing high going back to September 21 and a swing low on September 22.
That level was broken and the price moved to a low of 1.3381 yesterday before snapping back higher.
In trading today, both the Asian and early European session, found support buyers against the 1.34078 level (the lows came in at 1.3412). Those holds, increases the areas importance going forward (see green numbered circles in the chart above), and make it a barometer for both the buyers and sellers in the short-term.
A break below – with momentum – would have traders looking toward the low from yesterday, followed by the 50% midpoint of the move up from the August 11 swing low (not shown in the chart above). That midpoint level comes in at 1.3352. Move below the midpoint, and it opens the door for even further declines with the 100 average down at 1.32183 the potential target down the road.
Conversely, holding the 1.34078 level, and revisit of the 38.2% retracement and low of the red box swing area near 1.3500 cannot be ruled out.
Up and down price action today. The break out of the RED BOX near 1.3500 to 1.3510 has to be respected, but the price action shows some cause for pause near 1.34078 – 1.3412 as well.
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