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 is trading to a new session high that took the price to 1.3881. In the process, the pair moved above the September 28, September 30, and October 11 highs between 1.3837 and 1.38548.
On Wednesday and pre-CPI on Thursday, the price approached those levels before breaking higher after the CPI data yesterday. The price break moved to a new 2022 high at 1.3977. However, sellers re- entered at that extreme, and the mad rush out of the USD pushed the price back sharply to the downside.
The rebound today based near the 200 hour moving average (green line in the chart above). In the last hour so the price has move back above the swing highs between 1.3837 and 1.38548. The current price trades at 1.3868. Traders will now be watching the swing area (down to 1.3837) for close support. Stay above is more bullish. Move below and there should be disappointment from the buyers.
Taking a broader look at the weekly chart below, increasing the levels importance near the 1.3854 level are swing lows going back to 2020. At that time, the price moved sharply higher off the Covid lockdown and retraced back down to the 1.3852 area before consolidating.
Two weeks ago, the price of the USDCAD moved up to that level and found sellers. This week, the price broke above that level on the CPI and is now back above. Staying above is more bullish…
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