Currency pair USDCAD.
Another common tool used for making money on Forex, it is interesting for trading because the economies of the US and Canada
are quite closely interrelated, and some factors have completely opposite effects on the currencies of these countries.
The USDCAD currency pair is ideal for both professional and novice traders. Its accessibility stems from the ability to utilize fundamental analysis and its close correlation with several other exchange-traded instruments.
Effective trading requires understanding some of the specific behavioral characteristics of this currency pair, which we'll discuss below.
USDCAD Characteristics.
The US dollar is the base currency, so one lot is fairly easy to calculate: it's equivalent to 100,000 US dollars. The quote shows how many Canadian dollars are currently being traded for one US dollar; it currently fluctuates between 1 and 1.10 Canadian dollars per US dollar.
Scalping traders will appreciate the tight spread, typically no more than 2 pips.
The highest trading volumes naturally occur during the US Forex session , as both currencies forming the pair are located in virtually the same time zone.
Practical Trading:
Most traders choosing the USDCAD pair use its correlation with oil prices to forecast the exchange rate.
Since Canada is a major supplier of petroleum products, its currency appreciates with rising oil prices. Conversely, the US is a major buyer of Canadian oil, and rising oil prices often lead to a decline in the dollar.
Applying this fact specifically to the USD/CAD currency pair, we can say that when oil prices rise a downtrend , while when they fall, the pair can rise. In other words, in this case, we're talking about an inverse relationship.
It's important to remember that oil prices are far from the only factor influencing the exchange rates of the US and Canadian dollars, so we can't be 100% sure of a correlation.
The price of securities on the US and Canadian stock markets also has a significant impact on the trend.
the European session is more suitable .
