USDCAD, H4 & Daily
Equities rallied as oil prices rebounded after plunging to six month lows overnight. Front-month WTI crude prices are trading at near flat levels on the day, at $46.28, with the market now in a consolidative mood after lifting out of the six-month that was pegged last Thursday at $43.76. The move came after Thursday’s oil price pull-back and equity market decline. The narrative between booming U.S. production and OPEC-led supply trimmings continues to persist. The market is discounting that OPEC and its non-member oil producing allies will agree at a meeting on May 25 to extend the prevailing crude output curtailment for another six months, which would take it through to the end of the year. A jump in U.S. supply, meanwhile, is coming onto the market, though persisting price levels below $50.0 may deter some producers in costly shale extraction. Crude prices are presently down by 5.4% over the last week, and off by 11.9% m/m.
The Loonie also reversed course, charging higher against the U.S. dollar on the bounce in crude oil prices. However, this was temporary, since with Market opening today, USDCAD manage to stay above Friday’s closed at 1.3650. Today, a support above 1.3640, has been noticed for 4 consecutive sessions, in the 4 – hour chart, which was also a confluence area of the Lower Bollinger Bands. Hence this prompted today a Long position in the 4-hour chart, by considering also the fact that pair is in an uptrend since April 13th. Entry was taken at 1.3663.
Additionally, USDCAD broke earlier the 50-period EMA, crossed upwards the lower Bollinger Bands. The RSI is at 48 sloping up, while MACD remains positive. An intraday Target was set at 1.3715, which is also the confluence of 20-period EMA, in 4-hour chart. Meanwhile in the daily chart based on 14-days ATR, daily targets where set at 1.3750 and 1.3790. Support was set at 1.3600.
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