Up and down activity today.
The oil data showed a draw down in most inventories including crude oil. The exception was gasoline which showed a increase. The price of crude oil initially rose on the news but has since moved back lower (kinda like the activity in most currency pairs today). That decline has helped to push the USDCAD above the 200 day MA at the 1.3234 level and to new highs for the day.
The break has also pushed the price to a high level that corresponds with the high swing price going back to September 16th. From September 15 to September 26th, there were five swing highs between 1.3234 and 1.3247. Yesterday, the price extended above that area on two separate occasions. Each failed.
We are back testing that swing extreme. A break above should solicit more buying. Will the third break be the charm (you have to respect a break), or will it fail once again? If there is a failure, q move back below the 200 day MA will certainly disappoint the buyers. We could see a rotation back to the lows for the day if it happens.
