CAD Trades Like Petrocurrency Again Right When Oil Concerns Mount

CAD Trades Like Petrocurrency explained by professional Forex trading experts the “CAD Trades Like Petrocurrency” FX trading team.

CAD Trades Like Petrocurrency

The Canadian Dollarmay have picked a poor time for the correlation to Oil to pick back up since Oil has spent the last handful of trading sessions retreating from a 27-month high. The uptrend of USD/CAD has recently found support from a trendline drawn off the September low and October 19 low as well as the 21-DMA near 1.2743. Below this zone, traders may find support at the 38.2% retracement of the September-October range at 1.2723.

The under-performance of economic data paused on Thursday through the trend since September of underperformance remains concerning for CAD bulls. The price of Crude Oil has recently begun to explain CAD volatility as the correlation has risen to +0.2 after being flat for much of the summer as the 2-year yield spread between government debt was a driving force of the currency. Crude Oil bears have re-emerged after doubts surfaced about the long and how many countries will join the OPEC+ ( a moniker for OPEC and strategic alliances like Russia) production curb extension past March 2018 to further support the price of Oil.

The technical outlook is focusing on further rises against the broader downtrend that began in early May. Short-term support is the trendline drawn from September and October 18 low. Over the next few trading sessions, a hold above the November 10/9 lows at 1.2666/68 will provide a broader bias higher though sentiment below argues we could test and break those levels of support. Currently, a hold above the trendline and 1.2666/68 area favors a march toward 1.2799 (Nov. 2 low), followed by 1.2817/58 (Oct. 25/26 high,) and lastly the 200-DMA at 1.2985.

CAD Trades Like Petrocurrency Conclusion

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