A curious USD/CAD chart

[novice]

In light of recent USD strength, CAD has rallied against the USD.

On USD/CAD 1 day 6 months:

MACD-H is falling

13-day EMA is about to cross below 26-day EMA

These are interesting signals!

[novice]

Is USD/CAD not very correlated to EUR/USD? The USD might go in the same direction in each pair in general but it takes its own route. As opposed to the well correlated pairs below:

AUD/USD, GBP/USD and USD/CHF are pretty well correlated to EUR/USD.

Is USD/CAD is not that well correlated with other USD pairs then can it act as a source of diversification?

I did not include JPY because it has so much intervention I find it very hard to analyse. In fact IMHO it is more of a fixed currency than a free-floating currency.

[mishak]

Hello novice
Well, Canada is the closest neighbour for the USA, and a lot of trading occurs across the board. So USD/CAD has different behaviour than majors.
You are right, it is good for diversification (as any other currency pair).

Speaking about AUD, I think it is more correlated to CAD than EUR. These two non-major guys are often called "commodity currencies".

JPY may be difficult sometimes, however TA works as usual. You may just consider BoJ as a biggest "bull" participant.

Take care and have fun

[novice]

AUD and CAD are both commodity based economics. But for whatever reason AUD/USD's price action is very close to EUR/USD, GBP/USD and USD/CHF.

The joke that people think Australia is somewhere in Europe might have a grain of truth to it.

[novice]

Spoke too soon. USD rallied strongly against CAD. A flight to quality?

Anyway I think it is interesting that USD/CAD appears to lack the correlation of the other major USD pairs (excluding USD/JPY).

[mishak]

Well, Canada posted very week February jobs figures on Friday. It confirmed the expectations that BoC will cut interest rates again in April.
Threfore, CAD goes down...

[novice]

Thanks for the explanation.

The shorthand name for the CAD is the Loonie right?

Does Loonie have the same meaning in Canada as it does in Australia?

[mishak]

Loonie is a bird on the backside if 1 CAD coin - other than the Queen's head side.
Do not have a clue about what it means in Australia