Oil Feels Sick, The CAD Feels Dizzy
Skerdian Meta • 1 min read
The Canadian Dollar has enjoyed some great times since early May. USD/CAD has lost more than 6 cents (600 pips) during this time.
Some of the gains for the CAD came from the jump in oil prices over the end of last month. But, since the end of May, oil prices have lost about 10 cents.
That said, the Canadian Dollar has remained resilient despite oil prices falling about 20% in the last month or so, but that´s where the BOC (Bank of Canada) came in. The BOC has turned slightly hawkish, like most major central banks, which has helped the CAD.
Although, in the last two days, USD/CAD has climbed more than 100 pips. We could have seen this coming because the sellers were having trouble at the 200 SMA (purple) on the daily forex chart. This moving average has been providing support for more than a year.
Monday´s candlestick closed as a doji which is a reversing signal in a downtrend. Here we go, the reverse is happening, at least over the last 2 days.
USD/CAD reversed after forming a doji
The problems were oil prices and the BOC, which may send this pair in any direction at any time. Right now the price is at the 100 SMA (red) which is providing resistance. This might be a good place to look for a short scalp or a short term sell forex signal.
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