Makes a run to the downside....
Yesterday, crude oil prices were up over 8%. Today crude oil prices are up 4.25%. On Tuesday the USDCAD closed at 1.3429. Yesterday the pair closed at 1.3435 - up 6 pips on the day. Typically, the USDCAD moves lower on higher oil prices (CAD stronger). That was not the case yesterday.
Today, the pair has been mostly lower on the day (see chart above). However, the pair had been up and down until the last 4 or so hours of trading. With crude oil up another 4%, the pair is finally getting a reaction.
Looking at the hourly chart, the price has moved below a lower trend line connecting lows going back to November 10th. That line comes in at the 1.3333 level . That will be eyed as close risk for shorts. So far, the level has held on the top. Stay below is more bearish of course.
ON the downside, you have to take a step back and look at the daily chart. THe 50% of the move up from the October low comes in at 1.32964. The low today reached 1.3314 so far. That retracement is the next target. If we are breaking out of the consolidation on the top, that level needs to be broken. It should be broken. If done, we should see further downside momentum with the 100 day MA at the 1.3180 (and rising) a doable target over time.
