Does Oil Hold The Key To The Canadian Dollar

Aibek Burabayev - INO.com Contributor - Metals - Canadian Dollar


At the end of last month, I called for a substantial upcoming weakness in crude oil as the market could have finished the long-lasting consolidation after the earlier crash from 100+ levels. Indeed, oil lost almost $4 from that time and now is rebounding as markets naturally move in zigzags.

Oil-related currencies also suffer, and in this post, I would like to share with you an exciting chart setup with tremendous profit potential for one of such currency, the Canadian Dollar (CAD) also known as “Loonie” among traders.

Before that, I built a chart to demonstrate the correlation between WTI crude oil and the Canadian Dollar.

Chart 1. WTI futures Vs. Canadian dollar futures: Perfect Correlation

Canadian Dollar
Chart courtesy of tradingview.com

In the chart above the WTI futures graph is black on the right scale and the Canadian Dollar futures graph (in US$ per 1 CAD) is red on the left scale. I didn’t add any annotations on the chart as you can clearly see that the correlation is just perfect and the most important fact is that the crucial market phases like strong moves and consolidations coincide in time. The Canadian Dollar tends to overshoot WTI amid market strength, but it is quite moderate during market weakness. Continue reading "Does Oil Hold The Key To The Canadian Dollar"

Top Currencies Vs. Gold: Which Fiat Could Beat Gold in 2017?

Aibek Burabayev - INO.com Contributor - Metals


This is a traditional post with a performance review of top currencies versus gold at the end of the year.

The fiat money is represented by 7 currencies: US Dollar (USD) and 6 components of the US Dollar Index (DXY) placed by weight: Euro (EUR), Japanese yen (JPY), British Pound (GBP), Canadian Dollar (CAD), Swedish Krona (SEK) and the Swiss Franc (CHF).

Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold: The Only Winner

Gold vs. World Currencies
Diagram by Aibek Burabayev; Source: tradingview.com

This year the gold was almost as strong as last year compared to the top currencies and only one rival could escape from its death grip. The Euro was also very strong this year as the Euro Index scored a hefty 7.26% gain against its peers (USD, GBP, JPY, CHF). It helped the euro to outweigh gold by 2%. Last year the EUR finished on 5th place.

Below is the full ranking for Y2017 with the Y2016 places in the brackets. Continue reading "Top Currencies Vs. Gold: Which Fiat Could Beat Gold in 2017?"

Top Fiat Money Vs. Gold: What Shines Brighter in 2016?

Aibek Burabayev - INO.com Contributor - Metals


It becomes a tradition to post a performance review of the top currencies vs. gold at the beginning of the new year.

Fiat money is represented by 7 currencies: The US dollar (USD) and 6 components of the US dollar index (DXY) placed by weight: euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF).

Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold: No Comment

Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold
Diagram by Aibek Burabayev; Source: tradingview.com

The Euronews agency has a special rubric called “No comment” where they show video news without commentary as the picture speaks for itself when something dramatic, awful or really amazing is shown. I think the above diagram also speaks for itself and it shows the drama where the gold just smashed all of the fiat currencies as none of them could escape. None! Continue reading "Top Fiat Money Vs. Gold: What Shines Brighter in 2016?"

How The OPEC Deal Impacts The FX Arena

Lior Alkalay - INO.com Contributor - Forex


The much-anticipated OPEC deal to cut oil production has finally been reached. Brent and WTI Oil futures were not too late to react and jumped more than 7% with Brent Oil futures surpassing the $50 mark. And if momentum continues we could very well be looking at $60, perhaps rather soon. If that is the case, this can change the picture, not only for Oil futures and Oil companies but for currencies of Oil exporting countries, many of which were hit hard when Oil prices took a nose dive and could benefit now that oil prices are taking off.

The question is how exactly would an Oil rally play in petro-currencies in the current macro environment? Is it a good opportunity to buy into the battered Ruble? Or maybe a Norwegian Krona rally against the Euro? The options are numerous, but once we delve into the economic dynamics of each currency, the options narrow fast. Continue reading "How The OPEC Deal Impacts The FX Arena"

Gold And Oil Breakout: We Can Benefit!

Aibek Burabayev - INO.com Contributor - Metals


In my earlier posts I showed you how gold and crude oil broke out of their trends. Gold moved higher amid an oil break down. The simplest trade here is the purchase of gold on the dip and the sale of oil on pullbacks. Today I want to share with you some other options. We can use oil related currencies instead of oil as they tend to lag and overreact to oil moves.

Chart 1. Gold Vs. Russian Ruble Weekly: Say Hi To A New High!

Gold Vs. Russian Ruble Weekly Chart
Chart courtesy of tradingview.com

The currency of the world largest country stopped strengthening only last Friday despite that oil reversed much earlier. I call this an overreaction of the currency to the oil move. I guess it’s all about the mechanical reaction of retail USDRUB sellers to the ruble and oil strength which was gone long before they started to act. Usually, non-professional players tend to sell bottoms and buy tops on market panic. Another good thing in this market is that while the ruble was strengthening gold pulled back down, giving potential buyers extra bonuses (falling gold + overreacting ruble).

The Gold/RUB pair has been in an uptrend for 2 years. At the start of 2016 the market it broke out of the triangle above the RUB 78K level and then rapidly moved higher. It topped beyond 2015 high at RUB 101,858 level in February. Continue reading "Gold And Oil Breakout: We Can Benefit!"