By Abe Cofnas

While many Forex traders concentrate on the big 4 Major, including theEUR/USD, USD/CHF, GBP/USD, and USD/JPY, the opportunities presented by other currency pairs shouldn't be overlooked. An example is that the USD/CAD.

The loonie as it is called, is a classic instance where a currency pair reflects theunderlying fundamentals of the market of that currency. Specifically, the recentincrease in prices in the crude oil and also the upward trend in commodity prices has contributed to a strengthening of the Canadian market. Actually, the Canadian currency is known as a commodity currency, so it is correlated with commodity prices. This also means that a Forex trader needs to be aware of commodity price action that are driving factors in setting the direction in MANY currency pairs. It is not an accident that the CRB index has had a year and year so far has produced a new high 33 times! Commodities, as a business, are on the rise and this helps the Canadian currency. The current fundamental situation is a classic example of how important fundamentals are into a currency direction. Let's take a look.

Recent economic data show that Canada is increasing as a result of its role as an exporter of resources and, in fact, a net exporter of oil. Quotes on the tar sand oil book capabilities project a sum of recoverable oil greater than Saudi Arabia. As oil prices increase, the capacity to tap these reserves in a way that is cost-effective increases. It is logical therefore to see Canada as benefiting from this new era in oil prices. Canada's GDP is reflecting these fundamentals too. The July Canadian GDP report provides a snapshot of the Canadian market. The Canadian GDP advanced 0.2percent in July following a 0.3% growth in June. The growth in the GDP was concentrated in mining, oil and gas. However, the production, wholesale trade, and utilities businesses declined. It is important that the crucial state of Alberta, has experienced labor shortages. In effect, Canada has a western market based on service oriented market that has possibility for growth and an production and resources, two markets.

What does this mean to your Forex trader? The Forex trader, as a result of the fundamental conditions, will be able to see a rise in trading opportunities in the USD/CAD pair. Those traders trying to play the Canadian economy's strength should search for selling opportunities as well as signs. Recognizing that prices don't just move in straight lines, there will be intervals of retracement in which the loonie endures in worth as sentiment for the dollar moves up, and when oil prices sell away.

The recent charts tell the story. We see the USD/CAD pair testing 13 year service, and then retracement. A technical analysis of these price patterns reveals a substantial downward channel in this pair. The retracements in this weekly chart correlate with key Fibonacci retracement levels.


Https://www.forexforum.co.za/general...ount-size.html


This kind of pattern Offers ample trading chance for buyers and sellers. Let's zoom down into the 4 hour chart.

FUNDAMENTAL TIP:

Keep track of crucial Canadian improvements at the Bank of Canada site. Http://www.bankofcanada.ca/en/

OCTOBER 18th- INTEREST RATE DECISION BY BANK OF CANADA

The 4 hour chart below reveals a wide 250 PIP range.


Https://www.forexforum.co.za/trading...lory-days.html

The coming time period is when Forex traders should carefully watch the USD/CAD pair to loe best places to trade. Buyers of the pair are playing a countertrend move and have a nearly 100 pip goal to 1.1850. Sellers, on the other hand, have a much wider profit goal to the historic heights of 1.1600 which occurred this last week. This is the type of patterns in Forex that seasoned traders await. The egy of letting the market return to you rather than pursuing the activity applies in the case of the USD/CAD. Don't dismiss Canada in scanning for Forex transactions this week!