The EUR/CAD pair broke higher amid the session on Thursday, as we keep on seeing the uptrend in this pair. The Euro has been breaking higher throughout the day, and accordingly it bodes well that we ought to keep on going higher. This likewise is aggravated by the way that the Canadian dollar keeps on battling. The unrefined petroleum markets are falling, and accordingly the Canadian dollar has no genuine backing as of right now. The pair has been breaking higher for quite a while, so this is simply straightforward continuation.

The 1.43 level being broken is a decent sign also, as the union was broken to discharge the purchasers. This pair ought to now go to the 1.45 level next, as it is resistance on the more drawn out term graphs. It is likewise the vast, round, and noteworthy number because of brain research of it.

Purchasing pullbacks

I am purchasing pullbacks in this pair, as the business sectors ought to keep on coming to more elevated amounts, yet there will likewise be a considerable measure of instability. Actually, the business sectors ought to keep on showwing instability, as we are unquestionably inclined to seeing it in the mid year, and particularly since the European Union has quite recently risen up out of such a great amount of inconvenience in Greece. There is obviously going to be a somewhat of a help rally, yet it could be more than that before it is all said and done. All things considered, Canada doesn’t take a gander right now.

I am not intrigued by offering as of right now, and to speak the truth would need to see this business sector fall the distance beneath the 1.3750 level with a specific end goal to do as such. The 100 exponential moving normal is only above there too, so this would be a break of a few specialized hindrances of backing. With this, I feel sure about the uptrend, and that it will proceed. Oil can just help right now too…

The Euro had edged over the $1.10 level on Thursday, as FX dealers still consider deserting ship on the US Dollar. In the previous month, the US Dollar had surged about 5% against the Euro, yet this week its positive energy has blurred, with investigators communicating some carefulness that the year-long rally may be at long last coming to the end of its course. Indeed, even disregarding the solid probability that the Federal Reserve Bank appears to be set to raise premium rates, money strategists trust that probability has as of now been to a great extent calculated in.

As reported at 11:26 am (BDT) in London, the EUR/USD was exchanging at $1.0933, an addition of 0.60%, moving far from the session low of $1.0921 and back toward the day’s high of $1.1005. Against the Japanese Yen, the dollar was lower with the USD/JPY pair exchanging at 123.81 Yen, a loss of 0.12%.

Kiwi Lifted by RBNZ Surprise

Among monetary standards, the New Zealand Dollar encountered the most noteworthy development, with a 1.5% ascent after the Reserve Bank of New Zealand brought premium rates down to 3% from 3.25%; some FX brokers had been cheerful that the cut would be bigger given the RBNZ’s late talk. The Kiwi Dollar had as of late struck a 6-year trough and however the RBNZ had said that they were endeavoring to debilitate the coin, it appears that that sort of debilitating was an excessive amount to shoulder. The NZD/USD was exchanging at $0.6687, an increase of 0.70% and well off the session high of $0.6696.

Predicting where the direction of movement of the market is the key to be able to get profit in forex trading, but it is not an easy thing. Professional forex traders understand that the forex trading world has a broad scope is not limited to the world of forex.

In fact, the movement of currencies is affected by many factors: supply and demand, politics, interest rates, economic growth, and so on. More specifically, the growth ekonomomi and exports of a country is closely connected with the country’s domestic industry, then its currency to a particular country has a high correlation with commodity prices.

Three major currencies that have strong relationships with commodity prices is the Australian dollar, Canadian dollar and New Zealand dollar. Other currencies are affected by commodity prices but have a weaker correlation are the Swiss franc and Japanese yen. By knowing the currency which has a close correlation with the price movement of a particular commodity can help traders predict market movements. In this discussion we will see the correlation between oil prices and the currency that you can use the following information in forex trading.
Oil and the Canadian Dollar

In recent years, commodity prices fluctuate quite large. Oil is at $ 60 per barrel in 2006 and jumped to $ 147.27 per barrel in 2008 before falling to $ 40 per barrel in the first quarter of 2009 and then increased to more than $ 80 in 2011.

With the many countries in the world are experiencing a recession, trends in commodity prices may be a factor that distinguishes between further deterioration or improvement in the economy faster.
Oil is a major requirement in the world, at least for the moment, many people in the developed world is in dire need of this commodity. In February 2009, the price of oil is 70% below the highest number of $ 147.12 in July 2008.

The decline in oil prices negatively impacted the oil producers, while consumers benefit in purchasing power. The opposite occurred in early 2008 when oil prices reached record highs, oil producers got many advantages while declining consumer purchasing power.

There are several reasons that may explain the decline in oil prices, which are the increase in the value of the dollar (oil is still much that is valued in dollars) and weaker demand. As the oil-exporting countries, Canada was devastated by the decline in demand, while Japan as a major oil importer benefit.

Between 2006 – 2009, the correlation between the Canadian dollar and oil prices of approximately 80%. In everyday correlations are not too visible, but in the long-term correlation is quite strong stretcher, thus the value of the Canadian dollar is quite influenced by the price of oil.

Canada is the 7th country’s largest producer of crude oil, and continue to climb. In 2000, Canada surpassed Saudi Arabia as an oil supplier to the United States. That is not too much common knowledge, Canada is a country that has the 2nd largest oil reserves, under Saudi Arabia. Location closer and uncertain political conditions in the Middle East and South America make Canada a country of interest for the supply of oil to the United States. Canada does not only serve the demand of oil for the United States, but also from China and other countries.

Diagram 1 shows the positive correlation between oil and the Canadian dollar. It is not surprising that many investors using oil prices as a leading indicator for the price movement of CAD / USD. Keep in mind that based on historical data are negative correlation, when the price of oil increases, the movement of the USD / CAD down, and when oil prices are declining, the movement of the USD / CAD will go up.
Oil-CAD

Diagram 1: The correlation of oil prices and the movement of the CAD / USD from January 2005 until March 2009.

Some Forex brokers allow you to trade oil, gold, and other commodities, so you can use the diagram provided in the trading platform. You can monitor the price of oil on the Bloomberg website.
Oil and Japan’s economy

On the other side of Japan which imports almost all its oil needs (compare with the United States imported approximately 50%). Until 2011, Japan is the third largest oil importer under the United States and China. Japan’s lack of natural resources, thus requiring the import of crude oil, natural gas, and other energy sources, making the country highly affected by changes in oil prices. Japan also lacks the ability to switch to nuclear power source because it requires a lot of imported uranium as a resource for nuclear reactors. By 2008, the country’s dependence on imported energy sources exceeds 84%. Oil covers 49% of its energy needs, 20% coal, 13% nuclear, 14% natural gas, hydroelectric power 3%, renewable resources 1%. Thus, when oil prices soared, the Japanese economy will have trouble.

The influence of oil prices on the CAD / JPY
From the point of view of exports and imports of oil, the currency pair is deeply influenced by the movement of oil prices is the Canadian dollar against the Japanese yen (CAD / JPY).

Diagram 2 illustrates the close correlation between oil prices and CAD / JPY. Often, the oil price is the leading indicator (as with USD / CAD) for the movement of CAD / JPY. With oil prices continued to decline during this period, CAD / JPY broke through the level of 100 to 76.

Oil-Cad-Jpy

Diagram 2: The correlation between oil prices and the movement of the CAD / JPY from January 2005 until March 2009.

conclusion
The best way to use commodity in forex trading is to pay attention to oil price movements and observe how quickly the forex market will react, although in general there will be a slight lag (time difference) in the forex market response to commodity price movements. Not hurt you follow the development of the oil commodity prices when you are trading currency of the country is strongly influenced by oil import-export activities.

US dollar up trend is in the spotlight today. The greenback rose to a seven-month high against the yen earlier Wednesday, while US dollar index, which monitors the value of the dollar against six major currencies, rallied almost four percent since early July respond to positive economic sentiment US On Tuesday, the index reached 82 930, highest level of the year, after experiencing weakness in the first four months was 1.2 percent.

Hope that differences in monetary policy will continue to widen US policy in Europe and the UK will push up the value of the dollar index investors in line with consideration for US interest rate hikes, according to Capital Economics.

“The dollar rose against other major currency pairs in one year. But we do not believe this rally will stop, look at the prospect of monetary policy considerations US and other countries, “wrote an analyst at Capital Economics.

“At the end of 2015, we predict the dollar will strengthen further against the euro to $ 1.25, $ 1.60 against sterling, and 120 yen,” they added. On Tuesday the greenback (dollar) trading at $ 1.3121 against the euro, $ 1.6584 and 104.81 yen against sterling.

Fueling speculation the Federal Reserve in mid-2013 when the institute issued a plan to slash its quantitative easing program. But the current implementation of the increase in interest rates remains uncertain.

Last month the Fed minutes showed some policy committee members want to raise interest rates when the economy looks repair. However, overall the other members feel the need to monitor the data further before action.
By contrast, Europe looks dovish policy. Estimates of the increase in interest rates by the Bank of England faded amid concerns that arise as a result of the weakening of the wage data, while the European Central Bank (European Central Bank – ECB) is expected to take a step easing quantitative easing.

“We agree with the overall market view on interest rates in the future in the UK respond to market expectations of growth recently. And we also agree with the general view that interest rates in the euro zone will remain at the lower threshold for the foreseeable future, “said Capital Economics.

“Nevertheless, we still feel that the investors were too optimistic about the outlook for interest rates in the United States and that the Fed will tighten monetary policy more aggressively than originally envisaged, along with the strengthening labor market that affect the appearance of upward pressure on wage inflation,” added analysts.
“Our view is that the dollar will go higher,” said Ray Attrill, head of FX strategy at National Australia Bank.
If the Fed indicates a more hawkish tone again at the next meeting, investors may begin to take into account the rise in interest rates in the second quarter of 2015 rather than mid-year, thus encouraging the strengthening of the greenback, he said. “The next Fed meeting will be a catalyst for further strengthening”.

However, he acknowledged the risks: “When the moon is a statement similar to the statement issued in June – when they repeat the wording then there is a risk that the initial curve moved to the United States will respond to price adjustment due to tightening plan in 2015 that has been done in the weeks later. ”

Standard Chartered’s Callow index predicts the dollar will rally until the end of the year, but the dollar is not going to give too good results against some of the major currency pairs Asia.
“Our forecast is $ 1.27 to the euro and 106 yen to the dollar-motivated by positive economic developments in the United States, compared with Japan and the euro zone,” he said. “What are the factors determining a fundamentally better.”