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USD/CAD keeps soaring, as oil plunges

© Dukascopy Bank SA
"If you are looking to play weak oil prices you would want to sell the Canadian dollar and the Norwegian crown. With oil prices falling and some even talking about oil falling to $30 a barrel, revenues for these countries will take a beating and hence their currencies will remain under pressure." 
- CIBC World Markets (based on CNBC)

Pair's Outlook 

On Monday the US currency appreciated against its Canadian counterpart, climbing over the Sep high and stabilising in front of the 1.35 major level. The ongoing decline in oil prices is the main gauge of the Loonie's weakness, leading the USD/CAD to fresh ten-year highs. Where the monthly R1 and the weekly R3 lie (around 1.3530), there is insufficient supply to form a solid resistance. Strong Canadian fundamentals could diminish the pair's rally today, but not erase it completely; a close above 1.3540 is still the most probable outcome. 

Traders' Sentiment 
Bulls keep losing ground, as 64% of all open positions are now short. The number of buy orders dropped significantly, from 57 to 30%.
© Dukascopy Bank SA


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