The USD weakness appears to be increasing this morning with the USD/CAD moving down on the 4-hour chart. This is really an oil play as this pair has a tendency to fall as the price of oil rises.
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The USD weakness appears to be increasing this morning with the USD/CAD moving down on the 4-hour chart. This is really an oil play as this pair has a tendency to fall as the price of oil rises. FX traders use this pair to speculate not only on the economic factors of each country, but also on the price of oil. The US imports more oil from Canada than any other country which explains the relationship between the two currencies. Traders can sell on a move down through support or use their favorite technical indicator to time their sell entry. I have two levels of support on this chart to show how more aggressive traders could use on move down through support #1 as a signal to sell instead of waiting for the market to move down through support #2. Initial protective buy stops could be placed above resistance with targets to take profits set at twice that risk for our 1:2 risk:reward ratio.