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Home ANALYSIS

USDCAD moves to new low and tests swing area between 1.2463 and 1.24724

A.R Chowdhury by A.R Chowdhury
April 4, 2022
Reading Time: 4 mins read
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USDCAD

USDCAD on the hourly chart

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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 new session low in the North American session. The new lows have moved into a swing area between 1.2463 and 1.24724. The low price just reached 1.24671. The area held on the first look.

The move to the downside has not been without its “tries” in reversing back higher which has helped pave the way lower for the USDCAD pair today.

  • In the early hours of trading, the price moved back above its 200 hour moving average (green line), but could not sustain momentum (see green lines)
  • In the London morning session, the price moved back above its lower 100 hour moving average (blue line), but again could not sustain any upside momentum in the price moved back lower.

The buyers had their shots. They missed.

A move now below the swing area low (below 1.24631) would take the price into the lower extreme from last week which saw the price action stall at 1.24286. That low would be the next downside target on further downside momentum.

If the price can base against the swing area and move higher from here, ahead of a move back above the 100 hour MA, a move above the earlier low for the day at 1.24839 would be give short term sellers some cause for pause that swing area support held and with it, the momentum to the downside.

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A.R Chowdhury

A.R Chowdhury

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