USDCAD gained more territory today as Oil inventories came out better than expected even though the whole sales numbers missed the mark. Another piece of information came out yesterday as the Canadian PBO (Parliamentary Budget Officer) announced that the Canadian deficit will not be as big as they thought it was going to be, which in the end means we should be seeing some good numbers coming out of Canada. CDN strength is still in play, until USD gets its act together that is. A little overview of the week so far, we can see that H4 respected its pivot points from R1 past S1 which was good for a nice 300 pip move. What is to come from here?
Well as I like to speculate on what might be to come I see 3 possibilities ahead
- We reach this support area and see some USD strength and Oil weakness from here which at the moment is looking less than likely
- We drop right through support like a hot knife through butter and just keep selling at the daily 21 ema no questions asked
- USDCAD and Oil get stuck in this previous range from 2015 as everyone sells in May and walks away until the beginning of August, which is what seems to make the most sense to me at the moment. Don’t forget that theres an OPEC meeting at the beginning of June and Oil producers will have pumped all the Oil they need for a while so a freeze might happen and this whole market could lose momentum. Funny how both pairs seem to be arriving at that same interest area at the same time! Coincidence!!! You be the judge.
Trade Safe 🙂