Oct Crude oil futures up 4.1%
The October crude oil futures are up 4.1% in trading today (Oct is transitioning to the front contract month now) to 44.40 area. The price moved above a downward sloping trend line yesterday (see chart below). The contract traded as low as 37.75 on Monday. The rebound is a healthy 17.6% from the low. Of course, the price has fallen from 64.74 since May. So there is room to correct and still keep the "bearish figure"
The rally today, has caught the attention of the USDCAD over the last hour or so. The pair had been moving higher after an earlier dip (in Asian Pacific trading), bounced off support (see daily chart below). Oil was down earlier in the day and the Pavlovian reaction is to sell the CAD (buy USDCAD), but traders are rethinking that strategy now.
From a technical perspective the move lower has taken the price below the flattening 100 hour MA (blue line in the chart below) at the 1.3228 level. Admittedly, the price should not have moved back above that MA after breaking (it did it yesterday and today), but traders will likely give it another chance. Stay below this level, keeps the sellers in charge.
The next key hurdles on the downside to keep the correction lower in play comes in at the 200 hour MA (green line in the chart above). That level comes in at 1.3187.
Below that is a trend line on the daily chart - which found support buyers on the dip in the Asian Pacific session (see chart below) - is shaping up as another key target. That level comes in at the 1.3167 level. The low for the day came in at that level today. Shorts - looking for further corrective action - will need to see this line broken and stay broken.
