Frank Walbaum
FX Strategies.Asia
The novel coronavirus has brought upon a “series of unfortunate events”, causing most markets to plummet including the ailing oil industry. With the world now at a standstill, factory production has more than halved, travel has nearly halted, commuters are working from home, all of which means that demand for the black gold has suddenly evaporated. But what does all of this have to do with the EUR/CAD?
As Canada is a major oil exporter, CAD value is often impacted by changes in oil prices. With Monday’s historic crude futures oil plunge to near -$40 negative territory. We saw CAD pairs taking a hit. When the US later announced that it would support their oil industry with further stimulus we saw the CAD also responding to that with a short recovery, which is why in our morning webinar we chose to sell EUR/CAD at 1.5395 with SL initially at 1.5440 (now reduced to entry) and TP at 1.5290. Our trade was successful.
The market had climbed much higher during the first days of trading this week but is running into a major resistance area, which can be seen in the weekly chart. With the current volatility in the markets, we see demand in the Loonie which could weaken the EUR further.
But what happens next? The EUR is also showing some steady recovery, as more and more EU countries are gradually lifting lockdown measures. These contradicting powers of support for both currencies will definitely keep the EUR/CAD volatile and we would be looking closely for more short-term trading opportunities. Join our free live BDSwiss webinars to get real-time insights on key price action, market analysis, interesting entry points and much more.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This Webinar is purely for information purposes. Transactions or orders are for illustrative purposes only and should not be copied by traders. The content has been carefully compiled. However, no liability can be accepted by FX Strategies. Asia and under no circumstances should this material replace a consultation with a certified financial, investment or investment advisor in terms of their accuracy. Further information on our risk warnings can be found on our website under fxstrategies.asia.
Recommended Content
Editors’ Picks
EUR/USD extends recovery beyond 1.0400 amid Wall Street's turnaround
EUR/USD extends its recovery beyond 1.0400, helped by the better performance of Wall Street and softer-than-anticipated United States PCE inflation. Profit-taking ahead of the winter holidays also takes its toll.
GBP/USD nears 1.2600 on renewed USD weakness
GBP/USD extends its rebound from multi-month lows and approaches 1.2600. The US Dollar stays on the back foot after softer-than-expected PCE inflation data, helping the pair edge higher. Nevertheless, GBP/USD remains on track to end the week in negative territory.
Gold rises above $2,620 as US yields edge lower
Gold extends its daily rebound and trades above $2,620 on Friday. The benchmark 10-year US Treasury bond yield declines toward 4.5% following the PCE inflation data for November, helping XAU/USD stretch higher in the American session.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Bank of England stays on hold, but a dovish front is building
Bank of England rates were maintained at 4.75% today, in line with expectations. However, the 6-3 vote split sent a moderately dovish signal to markets, prompting some dovish repricing and a weaker pound. We remain more dovish than market pricing for 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.