The euro and the dollar of Canada aren’t the classic trading instruments. Despite this, the pair is famous. The main reason is the high variability of EUR.
The best time for euro trading coincides typically with the introducing of economic data and working hours at the stock, optional and futures exchanges.
Preliminary planning of these pieces of data requires two-sided research because economic catalysts such as Eurozone can move the popular pairs with the intensity compared to one provided by the enzymes in each of crisscross platforms.
Moreover, the economic data given by the US can influence all the currencies because of the foremost importance of EUR/USD.
Besides, euro crosses are very vulnerable to events of all kinds, such as political, economic and macroeconomic, which, in their turn, lead to highly correlated price actions on the shares, currencies and obligations’ markets worldwide.
A good example is represented by the devaluation in China in August 2015. Even natural disasters can affect the situation, as it happened with the tsunami in Japan in 2011.
We can conclude that the dollar of Canada looks more confident and stable compared with the euro as long as this currency isn’t so tied to the economic news. It is chiefly connected with the market of natural resources.
Canada is a prominent exporter of oil, that’s why black gold cost affects fluctuations of the rate so much. This explains the connection of CAD with the Asian market, which is the leader of consuming oil and mineral oils.
The growth of the Chinese economy, combined with a strong dollar provides stability for the dollar of Canada. Traders use it to remove a spread as long as the credit policy of the EU is very changeable.
A technical analysis of the EUR/CAD pair isn’t a good idea. It can only determine the approximate limits of the current corridor. But as a rule, it’s too narrow for arranging the orders.
The best time for entering the market is before the important economic news in the Eurozone will be issued and before the countries’ meetings. Here we mean the states are determining quotes for oil extraction.
The best time for trading these instruments coincides with the critical economic data at 1:30, 2:00, 8:30 and 10:00, and from midnight to the afternoon according to Greenwich. At this time, European and US exchanges keep all the cross-markets in the active mode.
EUR/CAD pair frequently has changes of rate within limits on a long-term basis. It sets the clear and precise trading ranges leading to the new trends.
Patience within these phases of consolidation can lower your risks when the support or resistance ceases to exist, and you face sales or a strong rally.
You should wait to use this simple strategy. If you enter too early, the range can hold on and provoke a turn. When coming too late, the risk grows because the position will be significantly higher than a new point or much lower than further resistance.
This pair brings high risks, and traders should know that. There is no way to lessen the chances. You can put the stop-loss very close to the entrance position, but the volatility can provoke unexpected losses.
The best option is to choose this pair for reserve trading or as an indicator of the general market’s situation. The newcomers definitely shouldn’t use the instrument, but the experienced traders can implement cunning strategies with their help.