USDCAD is moving higher on lower oil
The price of the USDCAD
USD/CAD
The USD/CAD is the currency pair comprising the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The exchange rate of the pair indicates how many Canadian dollars are needed to buy one US dollar. For example, when the USD/CAD trades at 1.3500, it means that 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the most traded currency in the world, while the Canadian dollar (CAD) is the seventh most traded currency in the world. The United States and Canada are geographical neighbors, and because of this 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 at most foreign brokers. Factors Affecting the USD/CAD There are a number of important economic or news events that can affect the USD/CAD. This includes, among other things, Nonfarm Payroll data for the United States, which is released on the first Friday of each month. Such measures tell us whether employment is increasing or decreasing, while the Gross Domestic Product (GDP) for Canada or the United States, measures the total value of all goods and services produced by the country. In addition, the USD / CAD is known as a “Commodity Pair”, because Canada possesses large amounts of natural resources, specifically oil, which is its most traded commodity. As a result, it is important for long-term USD/CAD speculators to pay attention to crude oil developments due to the strong negative correlation.
The USD/CAD is the currency pair comprising the dollar of the United States of America (symbol $, code USD), and the Canadian dollar of Canada (symbol $ code CAD). The exchange rate of the pair indicates how many Canadian dollars are needed to buy one US dollar. For example, when the USD/CAD trades at 1.3500, it means that 1 US dollar is equivalent to 1.35 Canadian dollars. The US dollar (USD) is the most traded currency in the world, while the Canadian dollar (CAD) is the seventh most traded currency in the world. The United States and Canada are geographical neighbors, and because of this 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 at most foreign brokers. Factors Affecting the USD/CAD There are a number of important economic or news events that can affect the USD/CAD. This includes, among other things, Nonfarm Payroll data for the United States, which is released on the first Friday of each month. Such measures tell us whether employment is increasing or decreasing, while the Gross Domestic Product (GDP) for Canada or the United States, measures the total value of all goods and services produced by the country. In addition, the USD / CAD is known as a “Commodity Pair”, because Canada possesses large amounts of natural resources, specifically oil, which is its most traded commodity. As a result, it is important for long-term USD/CAD speculators to pay attention to crude oil developments due to the strong negative correlation.
Read this Term saw an increase higher after the WSJ reported that OPEC was considering a 500K increase in production at its December meeting. The price of crude oil
Crude oil
Crude oil is the most popular tradable instrument in the energy sector, offering exposure to global market conditions, geopolitical risk and the economy. The instrument is strategically reliable and located in the global economy. Crude oil has proven to be a unique choice for traders given volatility and the effectiveness of both swing trading and longer term strategies. Despite its popularity, oil is a very complex investment instrument, given the litany of fluctuations in oil prices, risk and impact of policy stemming from OPEC. Short for the Organization of the Petroleum Exporting Countries, OPEC operates as an intergovernmental organization of 13 countries, helping to set up and dictate the global oil market. How to Trade Crude Oil Crude oil is most often traded as an exchange-traded fund (ETF) or through other instruments with exposure to it. This includes energy stocks, the USD/CAD and other investment options. Oil itself is traded through a duality of markets, including the West Texas Intermediate Crude (WTI) and Brent crude oil. Brent has been the more dependent on the index in recent years, while WTI is more heavily traded through futures trading at the time of writing. Aside from geopolitical events or OPEC decisions, oil can move in a variety of different ways. The most basic is through simple supply and demand, which is affected by global production. Increased industrial production, economic prosperity and other factors all play a role in crude prices. By extension, recessions, lockouts or other stifling factors can also affect crude prices. For example, excess supply or softened demand due to the aforementioned factors would result in lower crude prices. This is due to traders selling oil futures or other instruments. If demand increases or production plateaus, traders will bid more and more for crude, thereby driving up prices.
Crude oil is the most popular tradable instrument in the energy sector, offering exposure to global market conditions, geopolitical risk and the economy. The instrument is strategically reliable and located in the global economy. Crude oil has proven to be a unique choice for traders given volatility and the effectiveness of both swing trading and longer term strategies. Despite its popularity, oil is a very complex investment instrument, given the litany of fluctuations in oil prices, risk and impact of policy stemming from OPEC. Short for the Organization of the Petroleum Exporting Countries, OPEC operates as an intergovernmental organization of 13 countries, helping to set up and dictate the global oil market. How to Trade Crude Oil Crude oil is most often traded as an exchange-traded fund (ETF) or through other instruments with exposure to it. This includes energy stocks, the USD/CAD and other investment options. Oil itself is traded through a duality of markets, including the West Texas Intermediate Crude (WTI) and Brent crude oil. Brent has been the more dependent on the index in recent years, while WTI is more heavily traded through futures trading at the time of writing. Aside from geopolitical events or OPEC decisions, oil can move in a variety of different ways. The most basic is through simple supply and demand, which is affected by global production. Increased industrial production, economic prosperity and other factors all play a role in crude prices. By extension, recessions, lockouts or other stifling factors can also affect crude prices. For example, excess supply or softened demand due to the aforementioned factors would result in lower crude prices. This is due to traders selling oil futures or other instruments. If demand increases or production plateaus, traders will bid more and more for crude, thereby driving up prices.
Read this Term fell to an intraday low of $75.74 before a modest rebound. The price is at $76.18 currently.
The closing price for WTI crude on December 31, 2021 was at $75.35. The move lower today almost completed the “up and down lap” for the year at that level. The high for the year was $129.42 back in March. The price is down -39% from that high.
The average gas price in the US according to AAA is $3.66. That’s down from $5.01 (-27%). The price a year ago was at $3.41.
For the USDCAD, the price saw a price move above the 38.2% retracement of the move down from the November high (at 1.380742) to the low price reached on November 15 (at 1.3225). That 38.2% retracement level comes in at 1.34476 and represents nearby support for intraday traders. Staying above is more bullish from a technical perspective.
On the downside, if the 1.34476 level is broken, longer-term traders will look to the 1.3407 area as the next key support target. The level represents a number of different swing lows and highs back to November 8th and 9th (see red numbered circles on the chart above). Friday’s high price stalled at that level. Today, after breaking above, traders formed a floor near that level before wandering higher in the European session.
On the upside, increased upside momentum would have traders looking at a swing area between 1.3494 and 1.3510. The 50% retracement of the move down from the November high comes at 1.35163 (see hourly chart above).
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