The trading value of the US-Canadian (USD-CAD) currency pairing has been fluctuating in a downward trend, and it is expected to continue in a bearish mood next week with the Canadian dollar looking much stronger.
The outlook is mainly driven by the export of oil products and the economic relationship between the two countries, with Canada a major oil supplier for a US gradually reviving its economic activities.
The oil exports will lead to a higher demand for the supply of oil, contributing to a more positive outlook for Canada’s economy.
Such a situation makes it easier for investors to track trading trends and seize trading opportunities with higher returns.
According to the International Energy Agency, Canada’s economy depends largely on oil production and oil exports, including the duty-free export of 1,798,101 barrels of crude per day to the US.
Canada can generate a considerable amount of revenue with the price of crude oil hovering around $60 a barrel in the US, further bolstering the Canadian dollar’s value.
Canada has been enjoying special import and export tariffs to the US since 1994 under the North American Free Trade Agreement (NAFTA) – another trade catalyst for the north American economies.
President Joe Biden’s stated intention to maintain healthy ties with the US’ northernly neighbour and the interest rates of both countries being close to zero also bode well for bilateral trade.
These factors have played a role in keeping the price gap between the Canadian and the US dollar stable, lowering trading risks.
For this week’s recommendation, traders can trade USD-CAD with a sell-off price of $1.2600, setting the stop-loss function at $1.2650 and the take-profit function at $1.2450.