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Oil aims higher, reinforces USDCAD down trend

Oil Chart

  • A solid rebound into late July for oil (Brent and WTI), switching the intermediate term outlook from neutral back to bullish.
  • Moreover, the bullish move in oil has reinforced and sustained the intermediate-term bearish trend for USDCAD, which we look to extend into August.

ICE Brent Future – Intermediate-term bull shift and upside risks

September 2017 Contract

A significant rally on Friday, reinforcing the push last week above 49.90 and important resistance of 51.01, keeping risk higher again Monday.

Furthermore, our intermediate term outlook has shifted to bullish.

For Today:

l We see an upside bias through 52.68; break here aims for a key level at 53.19, then maybe towards 53.95.

l But below 51.90 opens risk down to 51.31.

Intermediate-term Outlook – Upside Risks:

l We see a positive tone with the bullish threat to 51.01, 53.19 and towards 55.14.

What Changes This? Below 47.18 signals a neutral tone, only shifting negative below 46.11.

Daily Chart

Oil Chart

USDCAD – Bearish threat

A short-lived correction at the end of last week with the Thursday rebound above minor resistances quickly rejected with a plunge back lower on Friday, resurrecting the downside threat into Monday.

Furthermore, the June push below 1.3219 signalled an intermediate-term bearish shift, which is very much intact.

For Today:

l We see a downside bias for 1.2411/05; break here aims for 1.2355, may be closer to a better support at 1.2304.

l But above 1.2500 opens risk up to 1.2576.

Intermediate-term Outlook – Downside Risks:

l We see a negative tone with the bearish threat to targets 1.2127, 1.2000 and 1.1919.

What Changes This? Above 1.3015 signals a neutral tone, only shifting positive above 1.3347.

Daily Chart

USDCAD Chart

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