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Home ANALYSIS

USDCAD erases earlier gains. | Forexlive

A.R Chowdhury by A.R Chowdhury
March 15, 2022
Reading Time: 4 mins read
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USDCAD erases earlier gains. | Forexlive

USDCAD

USDCAD retraces its gains to the upside

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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
has moved to retest the Asian session low. The early Asian session low reached 1.28117, and the price low just reached the same exact level.

In between, the price moved higher into the European/London morning session. The high price for the day extended to 1.28706. That was short of the next target at 1.28768 (high price going back to February 24).

A move back below 1.28117 would have traders looking toward swing levels between 1.2786 and 1.27939. The 100 hour moving average is also between those levels at 1.27889.

Below that level, the 38.2% and the rising 200 hour moving average are near the 1.2780 level.

Needless to say a rotation through those levels would increase the bearish bias as the market continues the up and down trading.

Conversely, if the buyers can continue to hold support against 1.28117, the dip buyers against the low would look back toward the swing highs for the day.

Recall just at two days ago, the Canadian jobs report came in much stronger than expected. That report sent the price down to the Friday low of 1.2693.

However most of the decline retraced into the close on Friday. During Monday’s trade, the price traded above and below its 200 hour moving average before finding support buyers against that moving average level in the North American session. The basing against the 200 hour moving average gave the buyers the go-ahead to run the price higher into the close. In the process, the price extending above its 100 hour moving average (blue line currently at 1.27889).

Sellers turned to buyers.

Now with the price extending toward the recent high extremes and finding sellers, does the pair retrace back toward the aforementioned moving average levels as the ups and downs continue? I would not be surprised.

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A.R Chowdhury

A.R Chowdhury

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