Currency pair USDCAD.
Another common tool used to make money on Forex, it is interesting for trading because the economies of the USA and Canada are
quite closely related, and some factors have completely opposite effects on the currencies of these countries.
The USDCAD currency pair is perfect for trading by both a professional and a novice trader; the reason for its accessibility is the ability to use fundamental analysis and close correlation with some other exchange instruments.
For effective trading, you need to know some features of the behavior of a given currency pair, we will talk about them below.
Characteristics of USDCAD.
The role of the base currency is played by the American dollar, therefore it is quite easy to calculate one lot; it is 100,000 US dollars.
The quote shows how many Canadian dollars are currently given for one American; at the moment, its figure ranges from 1 to 1.10 Canadian dollars for 1 American. Those who like to trade using the scalping strategy will be pleased with the low size of the spread; it usually does not exceed 2 points.
The highest trading volumes naturally occur during the American Forex session , since both currencies forming the pair are located in almost the same time zone.
Practical trading.
Most traders who choose the USDCAD pair to forecast the exchange rate use its correlation with oil prices.
Since Canada is a large supplier of petroleum products, the exchange rate of its currency rises with rising oil prices, while the United States, on the contrary, is the main buyer of Canadian oil and if its price rises, the dollar exchange rate often depreciates.
If we apply this fact specifically to the USDCAD currency pair, then we can say that when the price of oil rises, a downward trend , and when the price decreases, on the contrary, the pair can grow.
That is, in this case we are talking about an inverse relationship. At the same time, we should not forget that the price of oil is far from the only factor that affects the exchange rate of the American and Canadian dollars, so you cannot be sure of a 100% correlation.
The price of securities on the stock market of the USA and Canada also has an active influence on the trend.
The trend is quite dynamic; in one trading session the price can move several hundred points; its sharp movements are mainly observed during the American trading session. For lovers of quiet trading, the European session .