Shorting USD/CAD at the 20 SMA

USD/CAD tried to turn bullish today as the sentiment deteriorated, but surging Oil prices are keeping this pair bearish

Selling pressure is strong when smaller MAs turn into resistance

[[USD/CAD]] lost quite some ground in December, as the USD turned bearish, following the soft US ISM manufacturing report at the beginning of last month. The year-end cash flows gave the USD another push down in the last week of 2019, while the CAD has been following Crude Oil, which has been climbing higher.

Today we saw another surge in Oil prices after the killing of Iran’s Soleimani. The sentiment has turned bearish, which has hurt commodity dollars, hence the retrace higher in USD/CAD on the H1 chart during the morning. But, the 20 SMA stood ready to provide resistance on the H4 chart, as you can see from the image above.

That scared buyers, although the main reason that the climb ended was the bigger impact on the CAD from surging Oil prices, which have climbed around 350 pips during the Asian and European session.

As a result, USD/CAD turned lower again from below the 20 SMA. I decided to go short from there, but haven’t opened a sell signal, since we are having some technical issues, which we will take care of soon. So, as long as Crude Oil keeps climbing, USD/CAD will remain bearish.

ABOUT THE AUTHOR See More
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.

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