USD/CAD is heading towards the bottom again

Skerdian Meta•Wednesday, June 8, 2016•1 min read

USD/CAD has surged more than 40 cents in 2014 and 2015. But in the first few months, it reversed and lost 20 cents helped by the appreciation in the oil prices since they touched the bottom at $26/barrel in February. You know, the Canadian Dollar is closely correlated to the price of oil because Canada is a major oil producing country. It holds the thirds biggest oil reserves in the world, particularly in Alberta and in the Arctic.

USD/CAD resumed the downtrend again after making a pin candlestick five days ago

Last month though, it looked like USD/CAD had formed a bottom at 1.2450s since it ran up by more than 700 pips. The 1.30 level was broken but the 100 smooth moving average on the daily chart didn´t let go and provided solid resistance despite several attempts to break above it. Now the price of oil is on the run again and it has broken above the $50/barrel level. This has helped underpin the Canadian Dollar and USD/CAD is headed towards this year´s low again. This is a good opportunity to open a long term buy forex signal so we´ll keep an eye on this pair to see if it forms a base.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.