Forex

Bullish Turn On Crude Oil May Cause More Weakness For USDCADAug 25, 2022

Bullish turn on Crude oil out of ending diagonal (wedge) pattern can be strong resistance for USDCAD currency pair.

Hello traders, today we will talk about relationship between Crude oil and USDCAD pair from technical point of view and Elliott wave perspective. As we already know, they are in negative correlation as Canada has one of the largest oil reserves.

If we take a look on Crude oil chart, we can clearly see a completed ending diagonal (wedge) pattern within wave C of an A-B-C correction from the highs and with recent break back above 95 level, seems like correction is completed and we can easily expect more gains.

Bullish Turn On Crude Oil 4-hour chart
Crude oil 4-hour chart

Well, if Crude oil is really turning bullish, then USDCAD currency pair could be upside limited if we respect negative correlation. Looking at the chart, we can see it finishing ending diagonal (wedge) pattern within wave (C) of an A-B-C correction in wave B that can cause a reversal down back to lows for wave C.

Bullish Turn On Crude Oil - USDCAD Daily chart
USDCAD Daily chart

If we are on the right path, then Crude oil will stay up in upcoming days/weeks, while USDCAD can be looking for a bearish continuation.

Trade well!

USD can be nearing target zone against treasury bonds. Check also our latest DXY/ZN ratio chart HERE

Do you find this interesting? Subscribe to our newsletter and stay up to date.

In our newsletter you will find all the news and macro reports about Forex, Crypto, Commodities and more. Don't miss a thing!

    DISCLAIMER

    Any reviews, news, analysis, prices or other information contained on our website is provided as general market commentary and delivered electronically through a distribution channel to larger number of clients, therefore does not constitute investment advice or investment research. We are not trading advisors. Most of our work is for educational purposes only, with information based on Elliott Wave theory in real time. Trading forex, futures, options, stocks, cryptocurrenices or any another trading market carries a high level of risk, and may not be suitable for all investors.

    The possibility exists that you could lose some or all of your initial investment; therefore you should not invest money that you cannot afford to lose. Our website and the information that we provide should not be relied upon as a substitute for extensive independent research before making your investment decisions. In no event will we be liable for any loss or damage on your account in connection with, the use of our products. For any real cash investments you have to contact your financial advisor.

    Any information or material contained on our website is owned by Val Global d.o.o.. Reproduction is prohibited without Val Global d.o.o. prior license in writing.

    By continuing to use the site, you agree to the use of cookies. Learn more.

    The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

    Close