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.
Risk Warning: CFDs are complex instruments and come with a high risk of losing your invested capital 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.
The content of this material and/or any information provided by BDSwiss Group should not be in any way construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument and it is not intended to provide a sufficient basis on which to make investment decisions, in any manner whatsoever. Any information, views or opinions presented in this material have been obtained or derived from sources believed by the BDSwiss Research Department to be reliable, but BDSwiss makes no representation as to their accuracy or completeness. BDSwiss Group accepts no liability for losses arising from the use of this data and information. The data and information contained herein are for background purposes only and do not purport to be full or complete.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.