Oil price rebound helps USDCAD lower

Chris Lee

  • A significant recovery surge higher for the Brent Crude Oil future over the past week and move back above $50, rejecting the early May plunge.
  • This points to a potentially more positive tone through latter May for the Oil price.
  • Alongside US Dollar weakness over the past 1-2 weeks, the Oil price recovery has helped indicate a short-term top and negative tone for USDCAD.

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ICE Brent Future – Upside threat

July 2017 Contract

Another push to the upside as anticipated on Friday through 53.06 and this morning above the 53.77/54.03 area, reinforcing the Thursday rebound from ahead of important support at 51.04/00 and the aggressive recovery rally from early May, aiming higher again Monday.

The mid-May rebound through 52.16 switched the intermediate-term outlook to a broader, non-trend, range theme. Growing risk is for a push above 55.69 for a bullish intermediate-term view.

For Today:

l We see an upside bias through 54.17; break here aims for 55.00, maybe up to the critical 55.69 target.

l But below 53.37 opens risk down 52.64, maybe 51.88.

Intermediate-term Range Parameters: We see the range defined by 48.39 and 55.69.

Range Breakout Challenge

Upside: Above 55.69 aims higher for 56.99 and 58.14/54.

Downside: Below 48.39 sees risk lower for 46.64 and 45.90.

Daily Chart

Daily Ice Brent Crude Future

USDCAD – Downside risk

As anticipated a more negative theme with a push lower down through support in the 1.3526/10 area, reinforcing negative pressures from the mid-May surrender of notable support in the 1.3641/35/26 area, keeping the threat for a deeper correction lower Monday.

For Today:

l We see a downside bias through 1.3500 to target 1.3471; break here aims towards 1.3406.

l But above 1.3599 opens risk up to 1.3670.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 1.3837/59 and 1.4000/17.

What Changes This? Below 1.3219 signals a neutral tone, only shifting negative below 1.2965.

4 Hour USDCAD Chart