RidetheMacro| CADJPY Market Commentary 2020.09.21
As All Markets Face Sell Off On Monday Markets Opening. As CAD/JPY pair Dropped around the key level of 78.4xx 78.xxx.
Overall CAD is still under pressure but we are looking for some correction from the area of Key level to ride a Pull back.
📌 Certain currency pairs are highly influenced by commodities like gold and crude oil🛢️. The CADJPY is one of those pairs.
will go over the CADJPY Oil 🛢️ correlation and why these currencies are so tightly linked to the price of oil 🛢️.
Just like with any other trading strategy, this does not work all the time. Oil 🛢️ is not the only thing that affects these currencies.
However, as you will see, understanding this relationship can help you spot profitable trading opportunities.
The reason that this pair is so heavily influenced by oil is because Canada is a big exporter of oil and Japan is a large importer of oil.
Canada is the fifth largest producer of crude oil in the world and has verified reserves that is third only to Saudi Arabia and Venezuela. A majority of Canada's oil is in oil sands.
✅ CAD/JPY Vs WIT Chart 📊
Since Canada is a net exporter of oil, when prices rise it also helps increase the value of the Canadian dollar.
On the other hand, Japan only meets 10% of its energy need through domestic resources. Approximately 47% of its total energy requirements are fulfilled with crude oil.
Therefore, when the price of oil goes down, it is better for the Japanese economy and usually strengthens the Japanese Yen.
As OIL drop to 39.6x to around 39.5x A correction in WTI Expected.
📌Thus, if you have an opinion on the direction of U.S. equity markets over the coming days/weeks or even intra-day, CAD/JPY could be a vehicle you may want to consider to express that view.
✅ CAD/JPY VS S&P 500 Chart 📊
📌 On the other side CAD/JPY Also Correlated with Gold.
✅ CAD/JPY Vs Gold 📊
Like, subscribe and leave your comments below! 🤝
Until next time,
Ride the macro
Overall CAD is still under pressure but we are looking for some correction from the area of Key level to ride a Pull back.
📌 Certain currency pairs are highly influenced by commodities like gold and crude oil🛢️. The CADJPY is one of those pairs.
will go over the CADJPY Oil 🛢️ correlation and why these currencies are so tightly linked to the price of oil 🛢️.
Just like with any other trading strategy, this does not work all the time. Oil 🛢️ is not the only thing that affects these currencies.
However, as you will see, understanding this relationship can help you spot profitable trading opportunities.
The reason that this pair is so heavily influenced by oil is because Canada is a big exporter of oil and Japan is a large importer of oil.
Canada is the fifth largest producer of crude oil in the world and has verified reserves that is third only to Saudi Arabia and Venezuela. A majority of Canada's oil is in oil sands.
✅ CAD/JPY Vs WIT Chart 📊
Since Canada is a net exporter of oil, when prices rise it also helps increase the value of the Canadian dollar.
On the other hand, Japan only meets 10% of its energy need through domestic resources. Approximately 47% of its total energy requirements are fulfilled with crude oil.
Therefore, when the price of oil goes down, it is better for the Japanese economy and usually strengthens the Japanese Yen.
As OIL drop to 39.6x to around 39.5x A correction in WTI Expected.
📌Thus, if you have an opinion on the direction of U.S. equity markets over the coming days/weeks or even intra-day, CAD/JPY could be a vehicle you may want to consider to express that view.
✅ CAD/JPY VS S&P 500 Chart 📊
📌 On the other side CAD/JPY Also Correlated with Gold.
✅ CAD/JPY Vs Gold 📊
Like, subscribe and leave your comments below! 🤝
Until next time,
Ride the macro
