Oil up $0.74 to $30.62
The great market mystery early this week was how the Canadian dollar remained so strong even as oil prices were falling. WTI crude was $5 from its recent highs yesterday and yet USD/CAD had risen just 150 pips from its low.
It should have been a signal.
Oil turned around today and USD/CAD has been battered by more than 200 pips as crowded longs get squeezed out.
Levels to watch now include 1.3800 and the late-December low of 1.3782.
One idea that I've been mulling is that there is more underlying strength in advanced commodity bloc countries than believed.
The 15-year run in commodities allowed consumers and the government to sock away savings and it's left Canada, Australia and New Zealand more able to withstand commodity declines than anticipated.
