The link between CAD and oil prices
(Giles Coghlan LLB, Lth, MA – HYCM)
Canada is one of the largest oil producers in the world with substantial oil reserves contained within its oil sands. According to the Oil and Gas Journal, Canada has around 173 billion barrels of proven oil reserves and at the start of 2015, these reserves were ranked third largest in the world. According to the Visual Capitalist, Canada has around 10% of the world’s global oil reserves.
Canada is also the third-largest exporter of oil with around 99% of its exports going straight to its gas-guzzling neighbour, the US. So, the price of oil has a big impact on CAD. When oil prices are rising, the Canadian dollar is rising. When oil prices are falling, the Canadian dollar is falling. The correlation between the Canadian dollar tends to ebb and flow, but at times the correlation between oil and the USDCAD can be over 95%.
Check out the helpful visual below from the Visual Capitalist for global oil reserve allocations.
USDCNH: A minor wave Y is needed to complete the intermediate correction (4)
(Jing Ren – Orbex)
The internal structure of the USDCNH pair hints at the primary zigzag pattern Ⓐ-Ⓑ-Ⓒ, which in the long term forms a cycle correction IV.
The correction model today looks completed in two parts out of three.
The last primary wave Ⓒ takes the form of an intermediate 5-wave impulse (1)-(2)-(3)-(4)-(5).
The current structure may indicate that the market has completed the construction of a bullish intermediate impulse (3), and at the moment an intermediate correction (4) is forming in the market, taking the form of a minor double zigzag W-X-Y near 6.543. At that level, intermediate correction will be at 61.8% of impulse (3).
After the end of the correction (4), the market growth may resume within the final sub-wave (5) above the level of 6.839 marked by impulse (3).
An alternative scenario shows that the construction of the entire cycle correction IV could already be completed. It took the form not of a simple zigzag, but of a double zigzag consisting of primary sub-waves Ⓦ-Ⓧ-Ⓨ.
Thus, if this assumption is correct, the market may begin to move in a downward direction, forming the final cycle wave V.
Most likely, wave V will complete its development in the area of the previous minimum of 6.302, marked by impulse III. Moreover, at that level, wave V will be at 61.8% of impulse III. Therefore, the probability of achieving this coefficient is high.