Welcome traders to yet another AspireFX blog, today we’ll be looking at USDCAD. Since we recently had USOIL closing above $40 on the daily time frame, let us look at what affect that has had on USDCAD.
Looking at USDCAD on the 4 hour time frame, can see that we are currently in a rising wedge, finding resistance off of the descending trend line and more recently finding support off of the ascending trend line. We also have an inverse head and shoulder pattern illustrated by the ellipses which lines up perfectly with the second touch off of the ascending trend line.
On the 1 hour time frame we are currently pushing towards the descending trend line. We’ve had two rejections off of the 61.8, currently forming a doji showing indecision in the market. If price does push through the 61.8, the 78.6 and another rejection off of the trend line would confirm further downside movement.
With USDCAD and USOIL being pairs that correlate closely it will be important to look out for whether or not USOIL can again close above $40 on the daily time frame. Yesterday, the API Weekly Crude Oil Stock came out worse than expected which is also why we saw a push to the upside on USDCAD. The Crude Oil Inventories data coming out later today will be a crucial news event to consider when looking for a trade setup on this pair. If we see another worse than expected data release we could see USDCAD push up to the ascending trend line and possibly through it, depending on how bad the news release is. From an OPEC perspective there was a meeting held over the weekend where it was said that production cuts will be lowered to 7.7 million barrels per day from August and stay at that level up until December. This is a huge positive for the oil market as it means the current productions cuts are having the desired affect which can be seen with USOIL on an uptrend as of late.
Remember to trade safe, keeping news events in mind before entering the market and always use the correct risk management. Subscribe to receive notifications as soon as a new blog is uploaded!