- USD/CAD pair chart
- Technical analysis
- Underlying Factors Affecting the USD/CAD Currency Pair
- What determines the USD exchange rate - the main factors:
- What affects the Canadian dollar?
- trend for the near future
- Hourly schedule change during the day:
- Daily schedule:
- Is this currency pair suitable for beginners?
- Reducing losses in long-term and short-term trading
A pair of American and Canadian dollars is popular with experienced traders. On the Forex exchange, it is often called "loonie". It is noteworthy that the same name has a variety of birds of prey.
But this currency pair is designated as such due to the fact that Canada has unique coins that are used only within the country. They are called loonie - harrier or harrier.
Knowing Forex jargon helps to be on the same wavelength with experienced traders, so it can be useful for beginners.
Important! USD/CAD is one of the most popular pairs on the market. To successfully trade this asset, you need to “adapt” to it, to know all the nuances that affect the rate of the “American”.
The leading currency in this pair is the US dollar. The secondary (quoting) currency is the Canadian dollar. It is profitable to trade the pair when the US dollar exchange rate rises. This currency is international and highly demanded, but at the same time it is quite volatile.
The quote itself indicates how much US dollars is worth 1 Canadian. At the moment, these currencies are almost equal in price, but there are still sharp declines in the market, when the “American” significantly outperforms the “Canadian”.
Close economic relations are established between these countries, therefore, in the near future, a negative trend and volatility from currencies is not expected.
- the daily volatility of this asset is average (only 60-80 points);
- the size of the spread (the price difference between buying and selling) often does not exceed 2 points;
- the largest volumes of USD/CAD trading are observed during the American session;
- in other trading sessions, sales volumes are insignificant.
There is no time difference between America and Canada. Therefore, you can trade based on Toronto or New York.
Important! The Canadian dollar is a predominantly commodity currency, while US currencies are subject to change due to microeconomic and political news.
USD/CAD pair chart
Underlying Factors Affecting the USD/CAD Currency Pair
First of all, traders trading loonies need to track the price of oil. What is it connected with?
Canada is the world's largest "whale" in terms of oil exports. For this reason, sharp changes in the oil rate will inevitably affect the USD/CAD. Experienced traders always follow the news on the oil market.
Important! As the cost of oil rises, so does the price of the Canadian dollar. Accordingly, the very currency pair "American" and "Canadian" is losing value.
What determines the USD exchange rate - the main factors:
- microeconomic news within the country (GDP, inflation, exports and imports, and so on);
microeconomic news of the US partner countries;
- political news (to a small extent, but still reflected in the currency).
It is simply impossible to keep track of all the events, so it is best to use the economic calendar.
This will help predict positive and negative trends in relation to the dollar. It is also recommended to periodically read "fresh" news on English-language portals.
What affects the Canadian dollar?
As mentioned earlier - the turnover of the raw materials industry. The CAD course is very predictable. It is enough to track the price of oil, non-ferrous and ferrous metals. The cost of coal also plays a big role.
The trend is also affected by the value of securities in the two countries and interest rates in major banks. This information must be tracked, against the backdrop of other economic news.
Natural events (cataclysms) have little effect on this currency pair. The United States is a country where natural disasters rarely occur. In addition, the new president of the United States is not inclined to help other countries (even allies) on a selfless basis.
Therefore, cataclysms around the world also do not affect the exchange rate of the US dollar.
trend for the near future
Since 2000, there has been a strengthening of the Canadian dollar against the US. A significant change in this trend was observed only in 2008, after which everything stabilized.
Now the “gap” between currencies is small, but sufficient for profitable trading on a long-term basis.
At the same time, the currency pair is extremely popular with scalpers. This is due to small jumps, allowing you to get a quick profit. In the case of USD/CAD, you need to know all the current news, since in most cases the signs of a “reversal” of the trend are false.
Trading must be thought out to the smallest detail, otherwise there is a high risk of losing the invested funds.
Hourly schedule change during the day:
Important! Trading signals are a sign that a trader needs to enter a position. If the signal is confirmed, then you need to increase the volume of positions up to the purchase of the whole lot.
In this case, the spending is likely to pay off, which is largely due to the permanence of the asset.
Now there is a positive trend for USD/CAD. But, if oil strengthens the position, then the likelihood of short-term drops in the asset will increase. You should be on your guard, especially if a barrel (barrel) of "black gold" rises in price to 95-100 US dollars.
At the moment, the oil rate is undergoing minor changes, but the average price is still $55 per barrel.
Is this currency pair suitable for beginners?
USD/CAD trading is mainly done by experienced traders, scalpers. Such people can predict the course based on specific economic changes and other necessary data.
In addition, they have their own strategy, which allows you to trade with minimal risk. The USD/CAD pair is far from the cheapest and easiest to handle. Therefore, it cannot be said that it is suitable for beginners.
Beginning traders can lose everything if they do not think through every step they take. The main strategy used for transactions with the "American" and "Canadian" is trading on the news.
Such a strategy requires a person to be aware of "everything and everything." For a beginner, the abundance of information can simply boil his head. So in this case, you need to soberly assess your strengths and capabilities.
Reducing losses in long-term and short-term trading
In order not to blunder even without a strong strategy, you need to monitor the dynamics of the oil rate and rely on it. This tactic is used by people who are focused on short-term deals.
This helps to significantly reduce the risk of losing investments, as the trader begins to track false trend signals. This skill is fundamental to successful trading, no matter how long it takes.
Results. USD/CAD is not the most predictable currency instrument. Has a correlation with the price of oil (with a decrease in the cost of "black gold" is gaining momentum).
The currency pair also depends on the US microeconomic news and the cost of raw materials in Canada. USD/CAD has a low level of volatility. The asset is not suitable for beginner traders.