USD/CAD in the afternoon: a pair that changes character

[Amanhasnoname]

USD/CAD often behaves differently across the day. In the morning, it responds to US and Canadian data at 8:30 Eastern. In the afternoon, as oil trades and US equity markets drive risk sentiment, the pair can settle into slower, grinding moves.

Late in the New York session, liquidity falls, and the pair can drift in narrow ranges with occasional spikes. Mean-reversion strategies may find better conditions then, while momentum strategies struggle.

Correlation with crude oil is highest when oil is making notable moves. Otherwise, the relationship is faint.

An analysis of hourly ranges and trend persistence by time of day shows the pattern. The pair's afternoon behavior may differ from the morning enough to justify separate parameters or a different strategy.

Also compare spreads. Many brokers show wider spreads in the late New York hours as liquidity thins.

Rather than a single approach for all day, a split-session approach may fit the pair better.

How does USD/CAD behave in the late New York session compared with the morning?