How Oil Prices Impact 6C Futures: The CAD–Crude Correlation Explained
6C futures track the Canadian Dollar, and the Canadian Dollar tracks crude oil. If you don’t understand this relationship, you’re missing the biggest driver of CAD/USD movement. This isn’t optional knowledge — the oil market is basically the backbone of 6C price action.
Why Oil Even Matters for 6C
Canada is a major global oil exporter. That means higher crude prices strengthen Canada’s trade balance, boost government revenue, and attract foreign capital. The market prices all of that into CAD. When oil rises, CAD usually gains. When oil falls, CAD usually loses. And because 6C is CAD/USD, the futures contract reacts instantly.
| Oil Movement | Typical 6C Reaction |
|---|---|
| Crude pushing higher | CAD strengthens → 6C up |
| Crude selling off | CAD weakens → 6C down |
You’ll see the correlation clearly on days when oil explodes upward while 6C prints the exact same trend. It’s not perfect, but it’s consistent enough to matter every single trading session.
How to Use the CAD–Oil Relationship in Trading
Your job isn’t to memorize macro theory. Your job is to use the oil chart as a cheat code for timing CAD momentum. Here’s how traders actually use it:
- Strong oil trend → look for continuation setups on 6C
- Oil reversal → expect CAD to follow within minutes or hours
- Oil bullish but 6C lagging → potential CAD catch-up move
- Oil crashing → avoid longs, or ride the momentum short
If this feels similar to how USD strength impacts 6C, that’s because oil and USD are the two primary external forces hitting CAD daily.
Why Oil Doesn’t Always Control 6C
Some traders think CAD always tracks oil. Wrong. It’s a major driver, not the only one. The correlation breaks temporarily when:
- The Bank of Canada makes a surprise policy move
- U.S. data hits hard and overwhelms everything else
- Global risk sentiment flips aggressively
- Oil makes a small move but USD makes a massive one
But over long periods, oil remains the dominant structural driver of CAD strength.
Final Thoughts: Oil Is the First Chart You Check
If you trade 6C without watching crude oil, you’re trading blind. Oil isn’t a “maybe” factor — it’s the first thing CAD reacts to and the last thing it ignores. Build oil awareness into your process and 6C starts making sense fast.