5 Reasons Why CAD is Stronger? WTI in Falling Wedge. Does it Matter? Forex Trading Gold XAUUSD in Rising Wedge?

In today’s GCI Market Outlook, let’s take a look at Forex Trading on Gold, XAUUSD, Silver, XAGUSD, USDCAD, GBPCAD, Brent, and WTI Crude Oil.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

We have been going on about the WTI vs Brent crude spread, and it is back to over $6.

This is about normal, but the global crude oil market is anything but normal.

Prices are falling, but the market is still fragile with confusing reports about what ships are going in and out of the Strait of Hormuz.

Prices have risen a bit with Brent crude over $100 again.

But, if you watch the news, many countries are taking measures to cut do down energy use, all around the world.

This indicates that the supply problem will get worse very soon, driving up prices.

I know I have been saying that technical analysis is not always reliable during heightened geopolitical events like wars, but we see some interesting indications in WTI.

Firstly, we see WTI price action on the 4-hour chart in a falling wedge, which is usually a bullish pattern.

Also, we see MACD looking bullish as the signal line has passed out of the histogram.

If we look at the daily chart, we see MACD telling us the opposite while the Stochastic oscillator is oversold and turning up.

The moral of the story? Keep an eye on the news.

CAD is stronger, which is key as we have Canadian CPI data on Monday.

Inflation in Canada is still above target at well above 2% so this data is important and higher inflation means a stronger currency.

Also, anyone who trades CAD knows that a higher WTI means a higher CAD.

Remember what we just said about WTI.

Markets understand that the US Fed will likely lower interest rates sooner than the BoC, therefore CAD is stronger.

The Canadian government of Prime Minister Mark Carney just achieved a majority in parliament, signalling stability to markets, especially as Canada is negotiating myriad trade deals globally, thereby strengthening CAD.

And, finally, many funds that were short CAD are now long. Simple.

Regarding price action on CAD pairs, most pairs have either broken out or have yet to reach technical levels.

However, on GBPCAD, we see price action at or breaking the lower trend line, and the stochastic oscillator is very overbought.

MACD shows us the opposite, but this seems to be a common occurrence with serious geopolitical turmoil.

It is the same with Gold and Silver, as we spotted what might be a rising wedge on the Silver 4-hour chart.

Are we seeing one with Gold now?

Let’s keep an eye on the news and our charts.

That’s all for now.

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