Ahead of the oil inventory data at the top of the hour, the USDCAD is breaking lower as dollar selling intensifies. The crude inventories are expected to show a draw of -1.386 million. However, the private data reached late yesterday showed a surprise bill of 5.2 million barrels. The price of crude oil is up $0.66 or 0.97% at $68.74. Higher oil prices tend to support the CAD (lower USDCAD). Lower prices tend to weaken the CAD (Higher USDCAD)
Looking at the daily chart of the USDCAD above, the pair is extended to new session lows and in the process is making below its 100 day moving average of 1.35164. The 200 day moving average is the next major target not far away at 1.34999 (call it 1.3500). The 2 moving averages are converging suggesting a market that's nontrending from that perspective.
Drilling to the hourly chart below, the price decline today is also falling below the 38.2% retracement of the May trading range. That level comes in at 1.35237. The level is a risk-defining level now. Stay below is more bearish.
