Crude Oil (black) and Canadian Dollar (blue) Futures (Continuous Contract) Weekly
It remains to be seen just how important the recent low in crude oil is but we’re on high alert for a Canadian Dollar opportunity given the relationship between the 2 markets. You might hear one dismiss a long CAD (short USDCAD, EURCAD, etc.) opportunity because the currency failed to respond to the recent surge in crude prices but such logic ignores historical price behavior tendencies, in particular price behavior tendencies over the last year. Crude has tended to lead CAD at turns and the lag time between the 2 markets has been minimal since July 2014.
“Those that don’t know history are doomed to repeat it.” At its core, technical analysis is the study of market history and that famous line could be altered to;
“Those that don’t know history are doomed to miss it!”