trade

Don't Trade USD/CAD until you see This! How to Trade USD/CAD like a Pro

what's up you guys welcome back to the

channel my name is nick and i talk all

about trading and investing and today

we're talking about

the us dollar versus the canadian dollar

now

these two north american giants put up

against each other offer some really

unique

trading environment and in this video

i'm going to talk to you guys we're

going to look over the charts in just a

moment

and we're going to look at some ways to

trade the dollar canadian

in my view at a more successful rate

before we look at the technicals and

before we look at the nature of the

chart

and talk about trade setups there let's

talk about the two currencies

individually

first of all when we're looking at the

us dollar from a fundamental perspective

the biggest thing that comes to mind is

keeping tabs on what the fed has to say

you already know our boy jerome powell

has a big influence on what the us

dollar and the stock market does

it can go up it go down and go sideways

but it is ultimately

very much dependent on what is being

said by the fed and more specifically at

this time

the fed chairman jerome powell so we're

looking at the u.s dollar keeping tabs

on what the fed is doing

looking at tabs or keeping tabs on

unemployment and gdp growth rates in the

u.s

those are going to be things that are

very very important and of course the

treasured

interest rates that are out there and

keeping an eye on whether or not the fed

is trying to raise

lower or hold interest rates is going to

be a big big factor

on the bullishness or bearishness on the

us dollar

in contrast let's look at the canadian

dollar one thing you need to know the

first thing that i always keep an eye on

when i'm talking about trading the

canadian dollar

is what is the oil market up to the

canadians are blessed with a fantastic

reservoir of

natural materials and goods in their

very very large country

and one of the biggest things that they

export is oil so oil has a huge

component

is a huge component to their economy so

we're looking at the oil market

the cad is usually going to be somewhat

correlated

if the oil market is improving and

there's a big demand for oil

then that is considered good for the

canadian currency and vice versa

if the demand for oil is declining that

could be bad for the canadian economy

which is largely correlated and built

upon oil not only there are many other

things that go into the canadian economy

but

oil is a factor so keep in mind with

that of course

everything else that i mentioned for the

u.s same thing with canada

what's unemployment looking like what

are the interest rates looking like are

they looking to raise

or lower them and you know you can keep

tabs on that by looking at what canada

has to say in terms of

what their expectations are so these are

some things that from a fundamental

perspective i like to keep in mind when

i'm looking at the us dollar versus the

canadian dollar

or trading either one of these

currencies against anything else so

without further ado let's go look at the

charts and talk about some ways to

actually trade dollar cad

from a technical perspective

[Music]

all right guys so we're back on the

charts we're taking a look at usd

versus the canadian dollar so as i

mentioned it's going to be a big thing

to keep an eye on

the oil markets before we take a look at

usd cad too closely

let me show you guys one of the ways to

look at

oil you can type in wti usd this is one

way to look at the oil price

and you can see that oil recently at the

time of making this video has been on a

very very strong rise

ever since the crash that we had in 2020

this and keeping this in mind is going

to be very very important based on what

we said again about the canadian

economy uh keeping this in mind is going

to be very very important if this looks

bullish

it might be a good thing to think about

bullish opportunities on the cad as well

right right now we can see a nice a long

term trend here

to the upside on the daily chart ever

since the bottom that we formed back in

april of 2020 we've seen a steady rise

on the oil market that also bodes well

for the canadian currency so let's go

back to usd cad real quick and let's see

if this reminds you of anything

oh well it's going down why is that well

it's actually because

technically it is the canadian dollar

becoming more valuable because

remember this is the usd versus the cad

so what we're looking at here is we're

actually looking at the cad

rising but the us dollar falling and

that's why the currency pair is headed

down

so in fact lining this up with the

wti usd we can actually see something

quite

interesting so we just looked at wti usd

and then we looked at usd cad and we

noticed that they were sort of doing the

opposite of each other and that makes

sense because

the cad is getting stronger as the oil

price is getting stronger

which just to make it more confusing

causes usd cad to go down

but i think this visual might also help

you guys a little bit so i added a

correlation

coefficient down here at the bottom and

this shows us how correlated

a market that we're looking at dollar

cad versus

another market wti usd is and what

you'll notice is that there is a strong

inverse correlation here why is that

because

as the us dollar canadian dollar goes

down

that means the oil price is going up i

know that is still a bit confusing to

the new traders out there but what you

should know

is that a rising oil market is usually

bullish for the cad

and now we can see that the oil price as

it goes up the canadian dollar versus

the us dollar the usd cad

moves down as people favor the cad over

the us dollar

okay now one more thing i'll close that

out

one more thing for us to look at before

we go into the technicals too far

is we should look at the rough movement

of this market per day

and we can see that there is about an 87

88 pip move per day on average

on the dollar canadian at the time of

making this video i encourage you

if you'd like to look at the average

true range you can apply this indicator

on tradingview.com

and set that up for yourself to see what

it is at the time of watching this video

but for the last you know several months

we've seen about a

75 to 90 pip range per day on

average so keep that in mind when

placing your stop losses and looking for

trades on the dollar cad

okay next how do we actually look for

trade setups on the dollar cad and what

should we be looking for

going back to our fundamental idea

really quick if usd cad

is if the us dollar and the canadian

dollar are both

bullish or both bearish

the first thing we need to look at is

possibilities of a range-bound market

if both of these economies both of these

north american economies

sometimes they move together sometimes

they don't but if they are both bullish

or they are both bearish it can often

cause a market to trade

sideways right why would that make sense

well it's because we're crossing two

currencies

and if both of them are performing well

or both of them are performing poorly

relative to one another they're probably

not going to be dominating or

you know destroying the other one right

they're just going to be sort of

back and forth and in that case maybe

there's some range bound plays that

could be had i'll give you an example

like back here you can see here's a

range-bound market that lasted many many

months on dollar cad

the lower extremes got bought up and the

upper extremes got sold into

it changed in 2020 as people drastically

bought up the us dollar in favor of the

canadian dollar which

is just to to go to show generally what

we should keep an eye on also is that in

a

heavy heavy risk off or fearful market

environment

people at least historically seem to

favor the us dollar and they drop the

cad

right which also makes sense because oil

prices usually drop as well

in a slowing uh economy okay

okay so um back to this if things are

looking both bullish for the us dollar

and the cad or both bearish

we could probably expect a range-bound

market however if we see

one dominating the other like we have

seen with the recovery phase

where people very much favor the cad and

very much

anticipate more oil demand coming into

play which is good for the

the canadian economy we've seen this

trend to the downside where there's been

some really good moves to the downside

to capture

so these are things to look out for what

is the story in markets right now

until further notice i am preferably a

bull on the cad over the dollar now

it doesn't mean i'm gonna go buy

everything uh canadian just because you

know things look good

but it might give me a slight bias

towards the sell side and in that case

what i'm going to be looking for is to

sell into

supply so how do we mark supply well i

have videos on this if you want to go

watch a full video on marking supply and

demand zones

you can look up supply and demand trader

nick i'll pop up a picture of what the

thumbnail looks like

and you can go find that one for

yourself but a very quick version

is to look for key levels where price

basically reversed

strongly we can mark out a couple here

here's the level of

supply that i'd be watching for and a

recent level of of course

demand now i'm not going to be buying

demand uh

if i have a strong bias towards the cad

i'm going to be looking to

sell into supply on the dollar cad

because i'm i'm favoring sort of that

that canadian dollar

versus the us dollars so in that case

let's say we got a little bit of a rally

here right which we're starting to see

if price were to come up to a level that

i like maybe i look for an opportunity

to sell into that trend and to ride it

further my style as a trader might be

different than yours but i

am usually approaching the market with a

trend following sort of perspective

my favorite styles of trades are where

we have one currency

where i am bullish on and one currency

where i am bearish on

based on my analysis right so for

example

maybe i'm bullish on the cad bearish on

the dollar

and i'm looking for trend continuation

setups

here like i said earlier if this market

goes into a range bound if the us dollar

gets very very strong and we see this

market continue to

range then in that case i could possibly

be looking to sell the

supply levels and buy the demand levels

and just play the back and forth

until that changes an example of that

sort of would look like this area here

that would be a range-bound sort of area

and you can use the technicals and the

fundamentals to sort of identify that

usually you can see in the technicals as

well if you start to see

you know supply levels being held very

nicely and demand levels also being

respected as well

so that's something to keep in mind uh

as i usually have on my chart i have the

50 and the 200 period sma

we're looking at the daily chart but

some of the same concepts can be applied

on the lower time frames we could look

at

you know the four hour chart which is

one of my favorite time frames to trade

and still look for levels of supply if

you're a bear like me

looking for possibilities to short this

in a pullback like that

and of course going back to our initials

thought process which is keep an eye

on interest rates inflation rates that

sort of thing to

possibly make a judgment as to the the

fundamental bias or direction you think

a market is going to go i hope this has

been helpful to you on dollar cad for

those of you guys who

do trade this i hope this this sort of

cleared up some of the questions you may

have had if you enjoyed the video make

sure to like it down below and hey if

you made it to the end of the video

comment that you made it to the end and

i'll try and heart your comment i do

appreciate those you guys

who support the content and stick around

for the entire video thank you so much

we'll see you back next time guys thanks

so much for watching this video if you

enjoyed it please remember to

like the video down below because if you

don't you're statistically

84.7 more likely to blow an account in

the next 48 hours

don't ask me how don't ask me why that's

just facts

if you enjoyed that video and you want

to see more free content here on youtube

i'll be popping up some videos on the

screen now go ahead and click anything

that looks interesting to you and thank

you so