Oil is off lows but technical selling helping as well
Yesterday the price of crude oil fell below the $40 per barrel level (down about 3.6% on the day) and the USDCAD rose. Today the price is up about 0.9% and nearly all of the move higher in the USDCAD has disappeared.
Helping the fall, was the strong resistance above which turned buyers to sellers. This area I talked about in the post yesterday (click here). It was where the 100 and 200 hour MA was hovering at around the 1.3137 area. The high price in the Asian Pacific session reached 1.13406 before heading back lower.
On the fall, the price has now fallen back below the 100 bar MA on the 4-hour chart at the 1.30697 level. That level held after breaking below in the London morning session. This level will be eyed as resistance now (it was a level that traders leaned against on both sides of the line in yesterday's trading.
The next downside target on continued weakness would be 1.3022-26 area where there were lows from July 21 and again at the start of trading yesterday (see yellow area in the chart above). I would expect to see buyers on a dip toward that area.