USD CAD - exchange rate, price online, value, charts, historical performance, forecast, technical and fundamental analysis, comments and other financial information to help you make more informed trading and investment. USD CAD is one of the major pairs in the Forex market. Its trading volume is quite large and occupies a share of about 5% of the total volume of currency transactions on the market. Due to this, its liquidity is very high, and the spreads, on the contrary, are small. The elements of the pair are currencies that have a correlation with each other, which is why the movements of USD to CAD in most cases are quite smooth, and sharp jumps and collapses on the chart are rare.
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Technical Analysis USD CAD
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USD CAD for Investor
USD CAD is one of the major pairs in the Forex market. Its trading volume is quite large and occupies a share of about 5% of the total volume of currency transactions on the market. Due to this, its liquidity is very high, and the spreads, on the contrary, are small. The elements of the pair are currencies that have a correlation with each other, which is why the movements of USD to CAD in most cases are quite smooth, and sharp jumps and collapses on the chart are rare.In general, the volatility of the US dollar to Canadian dollar currency pair is at a moderate level, its trends are usually long-term, and technical analysis patterns are clearly visible. Medium-term and long-term strategies will have an advantage, however, during periods of increased volatility and short-term traders can freely work with the currency pair.
How much is a pip USD CAD
During the trading day, the USD CAD exchange rate overcomes an average of 30-70 points. To find out how much profit you can get if the pair passes, for example, 50 points, you need to calculate the cost of one point. For this, the formula is applied:Point price = Lot volume * 1 point
The size of 1 point for USDCAD, as for most currency pairs, is 0.0001. Accordingly, when opening a deal for 0.15 lots, that is, for $15,000, the pip value will be:
15000 * 0.0001 = 1.5 Canadian dollars.
To convert this amount into US dollars, you need to divide it by the current USD/CAD quote: 1.5 / 1.32558 = $1.13.
If the USD CAD rate breaks 50 points, the trader will earn $56.5.
How to trade USD CAD
USD CAD quotes depend on a number of both external and internal factors. Canada and the United States are linked both by proximity and a common border, and by close economic cooperation, which is why the news has less impact on this pair than on most other quotes with the dollar.All factors affecting the currency pair can be conditionally divided into 2 categories:
General - standard macroeconomic statistics, for example, data on GDP, unemployment.
Specific factors - due to the peculiarities of the economy of a particular country. For example, Canada's economy is highly dependent on oil prices, Australia and New Zealand - on the growth rate of Chinese industry and the general attitude of investors to risk.
General factors include (this applies to both the US and Canada):
- GDP growth rates.
- Decisions of central banks related to changes in monetary policy, interest rates. Comments of heads of regulators. Even the tonality of the statements of major officials is important, it can support one of the currencies or bring down its rate.
- retail sales statistics.
- Consumer price index.
- The level of consumer confidence.
- Business activity index.
- Unemployment and employment data. Of particular importance is the Nonfarm Payrolls report (statistics on US jobs created outside the agricultural sector). Both direct and indirect statistics are important, such as data on the number of applications for job loss benefits.
- Publication of the minutes of the FOMC (US Open Market Committee).
- President elections.
- Goods for durable orders. This category includes those goods, the standard period of which exceeds 3 years.
- trade balance data.
- The ratio of imports and exports.
These news are published in any economic calendar. In the filters, you only need to mark the necessary countries (USA and Canada) and limit the "weight" of the news, marking the data of medium and high importance.
Features of the US economy
The United States is one of the leading economies in the world, accounting for about 25% of the entire world economy. Pessimists often cite the ever-increasing level of public debt as one of the risk factors, but this is a moot point. In foreign currency, the amount is really impressive, but due to the scale of the economy, the state is able to service the debt without a critical overload. From the point of view of the ratio of the scale of GDP and debt, the United States is not among the world leaders, yielding to Japan and the same Canada.In the US, the service sector is developed, but not to the detriment of other areas. Science-intensive products are produced, such areas as IT, telecommunications, automotive, heavy industry, and aerospace are developed. The United States is also one of the world's leading exporters of agricultural products.
Developed mining industry. The territory of the United States is rich in minerals, in particular oil. After the shale boom, the states became one of the world leaders in the production of black gold.
A distinctive feature of the United States is its stake on the rule of law and high political stability.
The geographic location also works in favor of the steady development of the US economy. The ocean acts as a natural defense of the state, which allowed the states to avoid participation in military conflicts on their own territory over the past century. Moreover, due to the world wars, the United States strengthened its position as a world leader.
Trade with Canada and Mexico is developed, despite the trade war, trade relations with China continue.
Factors affecting the US dollar
In addition to the above general factors of influence in the case of the US dollar, we can distinguish:Possible problems with public debt. In theory, this could be a problem, but the bankruptcy of the United States is not beneficial to anyone. This factor has a short-term impact on the dollar only during those periods when there are debates about the next increase in the debt ceiling.
Trade war with China. Both the US dollar and the Chinese yuan are losing because of this.
Maintaining the role of the dollar as the world's main reserve currency. This is a unique feature of the American economy, in fact, the states can print unsecured dollars. If the role of the dollar begins to decline, its devaluation is possible. The risks of such a scenario have increased after the EU adopted a plan to gradually increase the role of the euro as a reserve currency. In the medium to long term, this is a bearish factor for the US dollar. Global confidence in the dollar is the foundation of America's well-being.
Also, the general state of the world economy affects the US dollar quotes. During periods of crisis, the US national currency index rises to record levels, the dollar is regarded as a "safe haven". In post-crisis periods, the opposite phenomenon is observed - an outflow of investors from the US national currency, and interest in risk is growing.
What affects the Canadian dollar
As in the case of the United States, you first need to understand the features of the Canadian economy. After that, specific factors affecting the Canadian dollar can be identified.Unlike the United States, Canada is content with a more modest role, not claiming to be a planetary leader and world policeman. In terms of GDP, Canada is in the top twenty of the world rankings. The standard of living is high, which is facilitated by the proximity to the United States.
Canada is rich in minerals:
- In terms of proven oil reserves, it is one of the top three countries on the planet.
- The mining industry is developed, the country is one of the leaders in the extraction of precious metals, copper, cadmium, nickel, sulfur, titanium and a number of other metals.
- The logging component stands out in the industry, about 50% of the land is covered with forests, which allows Canada to export lumber, paper, and pulp.
Statistics on trade relations with other countries proves Canada's dependence on the United States. The states account for over 75% of Canadian exports. The UK, China, Mexico, Japan are also among the largest trading partners, but their shares are an order of magnitude smaller compared to Canada's neighbor.
Factors affecting the Canadian dollar
The cost of oil. There is a correlation between USD CAD and oil prices. When the cost of a barrel falls, the USDCAD exchange rate rises, that is, more Canadian dollars are given for the US dollar. With a sharp drop in oil, the USD CAD chart also rises sharply. The correlation is most pronounced when there is a sharp drop or rise in oil. Under standard conditions with near-average volatility, the correlation may occasionally break down.The general state of the world economy. During periods of crisis, the Canadian dollar falls. This is partly due to oil, during periods of crisis, world production always falls, and hence the demand for black gold. After overcoming the global recession, the Canadian is growing, like other commodity currencies.
The state of the US economy. In view of the dependence of the Canadian economy on the American one, any recession, for example, in the US industry or the crisis of the American financial system will also affect the state of affairs in Canada.
The state of China's industry. The Celestial Empire can be considered an indicator of the state of world production, so the connection between these factors is obvious.
The national currency of Canada is classified as a commodity, so it recovers with an increase in investor risk appetite.
How to trade USD CAD
Both the US and Canadian dollars are most actively traded during the European and US sessions. Outside this time frame, volatility drops sharply. USD CAD is ideal for scalping - this style of Forex trading involves working in a narrow range with a small profit in points, which is offset by an increased lot.Technical analysis works, but false breakouts are not uncommon on USD CAD. The chart can make a throw beyond the level, but instead of fixing to it and continuing to move, it returns below the level. Right at the moment of the level breakdown, it is better not to trade, but to wait for a full-fledged fixation behind the support/resistance.
Indicator and graphic methods of analysis also work.
It is better not to use the correlation factor with oil in intraday trading. At short time intervals, the correlation may be broken and the processing of entry points will not be the best.
The pair is convenient for trading, but only for traders whose daily routine allows them to capture the European and American trading sessions.
The Canadian dollar is not a major reserve currency in the world. Despite the fact that Canada belongs to highly developed countries, its national currency remains regional and belongs to raw materials. CAD has been and remains a slave pair with USD, the forecast for the near future shows that the situation will not change.
As for trading instruments, the USDCAD pair is available not only in the Forex market. You can work with binary options on it, futures and options contracts are also available. Futures (regular, micro) and options are traded on the Chicago Stock Exchange. Regardless of the chosen instrument, the charts are the same, they can be tracked online and make sure that the quotes match up to 4 decimal places.