Sforex
Short

USDCAD NEXT WEEK: CONFLICT IN IRAQ COULD AFFECT ON LOONIE

FX:USDCAD   U.S. Dollar/Canadian Dollar
219 1 3
- FUNDAMENTAL ANALYSIS:

At the time I write this signal. the tension in Iraq is still not released. ISIS             troops took Mosul, and are threating Baghdad : The capital of Iraq.

The main reason why Crude Oil             escalated to 107 last week is tension in Iraq. As we know, Iraq is a big oil             export nation, and the tension disrupted oil             export of Iraq.

But why is it so important ? Clearly geopolitical insecurities in Middle East : Iraq and Syria impact on US Stock. After rising to 1955, SPX             fell to 1924.

Canada is an oil             export nation too, so the sharp jump of Crude Oil             clearly affects on Loonie.

Actually, many traders still hold the viewpoint that the bias of trading USDCAD             is BUY USD vs CAD. However, we saw a fact that after rising to 1.12, USDCAD             gradually fell to 1.08 despite of good economy of US and negative data from Canada even dovish bias of BOC             .

Theoretically, If Oil             rises, USDCAD             falls and vice versa. Apply in this situation, I see there is little change for CAD rallies. We should change the bias, it means we should SHORT USD vs CAD.

The tension in Iraq cannot be solved soon, so Oil             would continue rising, and it would weight on USD vs CAD.

- TECHNICAL ANALYSIS

There is no major support for USDCAD             until 1.07 level.

I will SHORT USDCAD             to 1.07 level, stop loss 1.0933

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My bias is short UCad until it reaches the top edge of the lower balance area at 1.07 where i'll be looking for rejection off that price to go long Ucad
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