USDCAD 1W
Updated
- The loonie (CAD) is strongly correlated with the price of oil
- Recent poor labour market data has not changed the BoC's approach
- USDCAD is near key long-term support
Recommendation:
Trade: short USDCAD for the market - Take Profit 1: 1.19
- Take Profit 2: 1.15
- Stop loss : 1.2650
Justification:
The trend on USDCAD is clearly downward since March 2020. In a little over a year, the pair has fallen to a 3.5 year low near the 2015 lows. After a possible breakout, the pair may hit an area where it hasn't looked since the oil market plunge in 2014. It is a known fact that the correlation between oil prices and CAD is significant. On the other hand, we live in times of elevated inflation, or at least elevated inflation expectations, a factor that plays into the hands of commodities. At the same time, the post-Covid-19 economic recovery is supporting export economies. From a technical perspective, the pair is testing the neckline of a massive double top formation.
Source: xStation5
Trade closed: stop reached
Stop loss : 1.2650
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.