The USD/CAD is one very interesting currency pair. Note that USA and Canada are neighbors and their trading sessions coincide with each other. Also, there is the aspect of crude oil refining and sales. The Oil sector always has a very significant effect on the currency of the country in question. The USD/CAD is a major currency pair, and it uniqueness also presents interesting opportunities for forex traders that you may not find with other currency pair.
The USD/CAD is also majorly dependent on the economies of the USA, and Canada. It might also be affected by occurrences in other parts of the world. As already mentioned, the Oil sector is one of the aspects that determine the movement of the USD/CAD currency pair. Note that the Oil industry is intertwined all around the world. As such, any happenings within the sector around the world have an effect on the dollar.
While do not claim to have a blueprint to trading with the USD/CAD profitably, we are certain that we can point you in the right direction. In the sections that follow, we are going to explore the ways in which you can trade USD/CAD successfully.
Follow along and learn how to trade the USD/CAD.
Techniques of Trading the USD/CAD
USD/CAD is a currency pair that has huge trading volumes. We’ve already mentioned that the trading sessions in Toronto and New York coincide with each other. That has both perks and downsides. It means a longer trading session and possibly more profit if you are trading profitably. It also means higher trading volumes which makes the currency pair a lot riskier to trade with. That should not make you worry though. There is no reason as to why you should not be able to make a decent profit, if you are being proactive with your trading endeavors.
Ensure you take these steps while trading with the USD/CAD.
- We’ve mentioned severally that USD/CAD is a volatile currency pair. As such, always take time to check the leverage first. You have to ensure that you have enough leverage to be able to make some profit. Keep in mind that higher leverage means more risks, but also more profits if you are able to win your positions.
- The other thing is the OPEC meetings. We’ve already mentioned that the USD/CAD currency pair is significantly affected by the oil sector. OPEC meetings involve oil selling countries. Canada and USA are among these countries. During this meeting, some deliberations are made and it is made clear which country has more oil reserves. You need to compared the oil reserves for Canada and USA. It will give you a good perspective of which currency is going to have a bigger demand in the future.
- You also have to keep an eye on the decisions made by the Federal Reserve Bank, and the Bank of Canada. These two banks make decisions pertaining to interest rates and monetary policy. These decisions have an immense effect on the value of the currency of the respective currency. Normally, the decisions made are based on the direction in which the currency is heading. In the same breath, they can give you an idea of where the currency is going to go next.
When is The Right Time to Trade with the USD/CAD?
Each currency pair has the most ideal time to be traded. The USD/CAD is the most interesting currency when it comes to what time you should trade it. That’s because it has the longest trading sessions. As we mentioned earlier, the trading sessions in USA, and Canada coincide perfectly. That means both markets in Toronto and New York are running over the eight hours. You can day trade with the USD/CAD currency pair. The best time to trade is between 8AM and 5PM American Time, which is a normal trading day in the US. During this period, the trading volumes are at peak, and you have better leverage, and the best chances of making a profit.
Despite the high volatility of the currency pair, the difference in value is large enough to guarantee profits if you can trade profitably.