CAD: Oil prices support a stronger Canadian dollar

Winkelmann

Forex

Summary:

Tensions in the Middle East pushed up crude oil prices, supporting a further strengthening of the Canadian dollar.

SELL USDCAD

EXP

TRADING

1.38909

Entry Price

1.38050

1.39700

1.38752 -0.00547 -0.39%

0.0

Pips

Flat

1.38050

Exit Price

1.38909

Entry Price

1.39700

Fundamentals

On Thursday, US PPI data for July was flat and in line with expectations, while the previous CPI data showed a slowdown in year-on-year growth. At the same time, the number of initial jobless claims increased moderately last week, reinforcing market expectations that the Federal Reserve would keep interest rates unchanged in September. As a result, the US dollar index fell and dropped below the 100 mark.

In addition, the ongoing geopolitical standoff between the US and Iran in the Strait of Hormuz and the continued strength of oil prices have provided some support for the Canadian dollar, suggesting that the USD/CAD exchange rate may be biased towards a downward trend in the short term.

Technical aspects

CAD: Oil prices support a stronger Canadian dollar_1

Looking at the 4-hour chart, USDCAD has turned down after a continuous upward trend, maintaining a wide range of fluctuations in the long term, and has been trending downwards in the short term, entering a phase of decline. Pay attention to the support level around 1.3800.

The main strategy is to sell on rallies. You can try shorting near 1.3900, with a target near 1.3800 and a stop loss above 1.396.

Trading advice

Trading direction: Short

Entry price: 1.3900

Target price: 1.3800

Stop-loss level: 1.3970

Downside support levels: 1.3800/1.3730

Upward resistance levels: 1.3960/1.4000

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