Today we will talk about Crude oil and its positive correlation with CADJPY currency pair.
As you can see, Crude oil and CADJPY are in tight positive correlation and both made a complex W-X-Y corrective decline from the highs with nice and strong support from April/May.
The main reason why they are correlated is because Canada has one of the largest OIL reserves, that’s why CAD is strong when OIL is up. If we also consider risk-on sentiment, where OIL is bullish and JP yen currency bearish , then we get that result.
Well, respecting the price action and wave structures, with current strong and impulsive rebound, it looks like a correction within uptrend can be completed and we can expect further rally at least in three waves. So more upside can be seen after a short-term pullback, maybe even back to highs.
Elliott Wave Analysis And Correlation Between OIL and CADJPY by ew-forecast on TradingView.com