- Despite the oil price setback over the past week, key support is holding at the uptrend line from June, highlighting risk for a recovery effort to sustain the underlying bullish intermediate-term trend.
- The oil price setback has encouraged rebound in USDCAD, but we look for this to be corrective and for the underlying intermediate-term bearish trend to resume.
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ICE Brent Future – October 2017 Contract
A more negative tone Wednesday with the Push below support at 51.30, easing upside pressures from the strong recovery effort from mid-August from 50.00, but a rebound this morning from the uptrend line from June at 50.58 points to a recovery theme for Thursday.
The late July reversal up through the down trend line from April shifted the intermediate term outlook to bullish.
- We see an upside bias for 51.45; break here aims for 52.19.
- But below 50.58 opens risk down to key 50.00.
Intermediate-term Outlook – Upside Risks:
- We see a positive tone with the bullish threat to 55.23, maybe closer to 57.40
What Changes This? Below 50.00 signals a neutral tone, only shifting negative below 47.94.
USDCAD – Intermediate-term bearish threat intact
An unexpected strong recovery effort on Wednesday through resistances in the 1.2540/42 area and also 1.2607, creating a very small bottom pattern and signalling a further recovery bias into Thursday.
Moreover, the setback from mid-August reinforced the intermediate term bearish theme, whilst contained below 1.2778.
- We see an upside bias for 1.2691; break here aims for a key level at 1.2778.
- But below 1.2602 opens risk down to 1.2496.
Intermediate-term Outlook – Downside Risks:
- We see a negative tone with the bearish threat to targets 1.2127, 1.2000 and 1.1919.
What Changes This? Above 1.2778 signals a neutral tone, only shifting positive above 1.3015.