There is much speculation about oil prices ballooning to the $75/barrel mark, while this is a possibility given the demand, I don’t see that happening say in the next couple of weeks. Yesterday Oil prices rose to 12 month highs of $56/barrel but then quickly shaved all the gains and came back to $52 and that is where it is currently trading at. Given the volatility, I will expect prices to trend down lower back to the $45 handle before anything spectacular happens especially after Trump inauguration and also from the behavior of my indicators. The weekly and daily charts stochastics are overbought and yesterday’s bearish engulfing candlestick in the Oil daily chart only cemented calls for shorts in the coming trading days.
A look of the NZDCAD will also tell you of a carry trade in development. Even though my long term call for this currency pair is bearish, in the mean time I expect prices to trend higher maybe upto the 0.943 level that is where there is some immediate resistance from support turned resistance trend line drawn from July’s and October’s lows which was recently broken in December. Also look at how the 0.9250 support level held with both upturns supported by oversold stochastics and increasing long position. Today, there is a chance of resistance trend line of 30.11.2016 and 14.12.2016 highs being broken and price trending to at least 0.943 for some quick 150 pips and therefore given the projected weak fundamentals to be reported from Canada towards the end of the week, I shall trade as follows with entry in the 1Hr chart depending on if prices trends higher or lower. Also note the general trend in the 4HR chart is up and the retracement towards the 0.9250-70 levels-current trading zone-was a bullish flag. Break above resistance trend line in the 1HR chart is more likely to happen.
If it trend lower, then trade as follows:
Buy Limit: 0.9270-0.9250
Stop Loss: 0.9215
Take Profit: 0.9430
If it trends higher and breaks above the resistance trend line in the 1HR chart then trade as follows:
Buy stop: 0.9320
Stop Loss: 0.9270
Take Profit: 0.9450
Have a good trading day.