 Good morning and welcome to the chart of the week video with me David Madden Today's date is Friday the 4th of December 2020 and the time has just gone 935 GMT and this week's chart of the week is the US dollar versus the Canadian dollar also referred to as the dollar CAD If you take a look at the chart over the last few months We can see that's been in a fairly clear and aggressive downward trend the last few months Particularly the last few weeks Combination of things the US dollar as a whole has been has been under under pressure The Canadian dollar has been doing relatively well because of the rebound we've seen in the oil market So hence why we've seen a major sell-off in dollar CAD and in fact the lows that we're seeing today We're the lowest level seen since October 2018 So we're talking over two year lows were set today. If you take a look at today's price action It's a very The opening price isn't too far away from the closing price And we see a fairly small range in terms of the highs and lows. It's not really surprising because today Have some have a couple of very important economic indicators a 1330 GMT We have the US non-farm payrolls numbers out, which is the US employment numbers But we also have the Canadian numbers coming out as well at the same time In fact, those numbers can be viewed on our An economic calendar under news analysis third option down. You can see here on the market calendar The details will populate in there. So it's not really surprising that Dollar CAD hasn't moved a whole lot on today's session. Oh, but obviously depends on how things play out Like I said a minute ago the US dollar as the US dollar index has been quite weak recently So if we do have a better than expected job numbers that could give an incentive for trade to do some bargain hunting on the relatively weak US dollar Conversely a weak US jobs report would probably add to the kind of bullish view on the on the dollar So that we could see the continuation of the downward trend that's been in play But keep in mind it also depends on what's going on with the Canadian jobs report if you take a look at the price action the last few days the last couple of Of of Updates have been quite aggressive in terms of negative move We can see there's a steady rise in negative momentum On the market indicator. So for the time being the momentum is with the bears If you press on lower from here, we could be looking at you heading back down towards this area here We could be heading back down toward this area here in one spot 25 27 Apologies if you take off because we're currently in around one spot 28 60 If they continue to move lower from here We could be looking at retesting the lows of early October 2018 in around one spot 27 82 And if you go below that we could then be looking at heading down towards the the lows of April 2018 in around one spot 25 27 Now conversely if you rebound from this area, where could we potentially run into resistance? We could see resistance in this area here in around one spot 29 28 We could notice on the complications like to support and it's sort of active resistance Only only yesterday if we do manage to take off that level We could be heading back up toward this general zone here north of 130 130 itself will be kind of deemed an important figure, but we can see here just north of it in around one spot 30 29 One spot 30 22 we can see in a few occasions when the market wasn't the downward trend It hung around that zone and then before had the next leg lower So a break below that will be fairly significant any moves beyond that Could bring the fifth of the moving average this blue line here into play We can see in a few occasions that around that metric we did see some areas in consolidation And similar situation with the this yellow line here the one for the moving average No, it's fairly clear that there were a few spikes above it But on the various different occasions where the market traded above the one already moving average didn't actually successfully Kind of close on usually under that metric So just be mindful of that so keep an eye out for once about 30 to oh two to the upside should we see a Move higher a dollar CAD now if you aren't gonna be trading the Canadian dollar I would suggest to keep an eye on what's going on on the oil market I'm currently looking at crude oil West Texas to the cash contract From the lows of April it's been a solid upper trend and only today Yet again, it's yet another multi-month high So we're now back to levels last seen since early March 2020 if you press on higher from here the oil contract We could be like me heading up towards 4850 and if you go beyond that sorry 48 spot 53 If you go beyond that it could be like heading towards 50 bucks a barrel if that is the case that'll be that's that's likely to have a positive impact on The Canadian dollar and therefore that could kind of continue to put pressure on the dollar CAD because as we can as you said There's been a downward momentum across the board on the US dollar but conversely There's been strength on the Canadian dollar because of the rebound in the oil market for those of you don't know We here at CMC markets Offer a number of currency baskets. It can be found here under the products. We can throw it down here Coming down to Forex indices so we can see here if you're looking to see how the dollar index has performed on its own We can see here that the CMC you have dollar index Has been in a fairly obvious downward trend the last few months. I Conversely if you take a look at the CMC CAD index the Canadian index we can see in the flip side of it has been broadly speaking been moving higher the last few months So we can see here that it's fairly obvious in the two currencies in their own right Have a good I've been going up directions and today We're highlight see valid high volatility because of both the Canadian jobs numbers and the US job numbers at 13 30 GMT that's all from this video. Thank you for listening. Have a good trading trading day. Have a nice weekend