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Home ANALYSIS

USDCAD tests the 38.2% retracement of move down from March high

A.R Chowdhury by A.R Chowdhury
April 7, 2022
Reading Time: 4 mins read
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USDCAD

USDCAD tests 38.2% retracement

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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
is trading to a new session high and in the process is testing the 38.2% retracement and swing highs from March 24 March 28 near 1.25853 and 1.25923. The price just to the above the 38.2% retracement. Buyers are making a play to the upside.

Earlier today, the USDCAD price did down but found support near the swing high from April 1. A swing low going back to March 23 also is in the area between 1.2536 and 1.25423. Holding that level on the dip not once but twice, gave the buyers the go-ahead to push higher.

Moving above a swing area at 1.2561 and 1.25696 (see blue numbered circles) was another bullish move in the last few hours of trading. That level is now a close risk level on the downside. Stay above and the buyers remain in control.

A move higher would next target the 200 day moving average of 1.2617. The USDCAD’s price moved below the 200 day moving average back on March 22 and has not been above that moving average level since that time.

Later this afternoon, the national budget will be released. Yesterday, it was leaked that foreign buyers of real estate would be stopped for the next two years in an attempt to stop the surge in home prices. The market is selling the CAD ahead of the news/budget..

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A.R Chowdhury

A.R Chowdhury

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