The greenback is generally stronger this morning, lending to the pressure on commodity prices. Gold and crude oil are getting hammered; not surprisingly, commodity currencies are under pressure.

The currencies of countries that export a lot of commodities are typically referred to as "commodity currencies". Examples include Canada's dollar, Australia's dollar, New Zealand's dollar, and South Africa's rand.

I've been waiting for an opportunity to short the Canadian dollar (CAD) and I think we're there. The catalyst is the crack in crude oil, which is down by about $7 over the last couple of trading days.

Crude is hovering around $139 at the time of writing. Further downside in crude should lead to further weakness in the CAD. I like playing this trend via the USD/CAD, using 1.0200 as an action point. A breakout above 1.0250 would confirm the trade. Stops can be set anywhere between 1.0000 to 1.0125, depending on risk tolerance.

USD/CAD Daily Candlestick Chart and Point and Figure Chart

Another way to play any further unwinding in the commodity complex is with the NZD/USD. Although the NZD/USD isn't linked to crude oil prices, the pair is closely correlated with food prices.

I've been bearish on the NZD/USD for a while; my last update can be read below:

Lower Highs and Lows Make the NZD/USD a Good Short

The NZD/USD is near its June lows; therefore, some of the downside potential has already been realized and the upside risk is greater. I prefer new entry points closer to 0.7600 and, as such, I'm waiting before taking any new trades. The pair is on my radar, however, as I think it will work much lower over the next couple of months.

NZD/USD Daily Candlestick Chart and Point and Figure Chart