For obvious reasons, all the focus is on the OPEC meeting. As we pointed out the possibility yesterday, oil prices have bounced back very strongly today on renewed hopes that oil ministers will, after all, be able to hammer out a deal later on to limit crude production.

Brent (BNO, quote) was up a good 8% at the time of this writing. No official announcement has been made yet, but the markets seem convinced about the outcome. The only thing speculators are not too sure about yet is the detail of the deal: who will cut oil production and by how much, and who will freeze and at what levels?

But with oil prices having already gone up so much and still rising, I wouldn’t be surprised if prices then start to ease back a tad in a typical “buy the rumour, sell the news” reaction. However, the potential selling pressure will likely be mild, unless of course the negotiations break down. But it is also possible that the deal to limit oil production will not be bold enough. So a lot can still happen. But for now, oil is going up and this is boosting everything linked to oil: energy stocks, the commodity-heavy FTSE 100 index and the Canadian dollar, among others.

Brent oil (BNO, quote) has reinstated its bullish trend line following today’s rally. The key level to watch is the recent range high at around $53.70 which is inside the longer-term resistance area between $52.80 and $54.30. For the long term trend to turn decidedly bullish again we need Brent above those levels. If so, the next bullish objectives would be the Fibonacci levels shown on the chart, starting with $56.45 which was also an old low. In terms of support, the broken resistance level at $49.90/$50.00 is the first line in the sand. Lose that and we could drop to $48.00 or even all the way back to the 200-day average if there is yet another twist in OPEC discussions.

WTI oil (USO, quote) has likewise rallied hard into the next short-term area of resistance at $49.00. Further resistance is seen in the range between $50 and $50.90. Beyond that, the next bullish objective would this year’s high at $51.90 – long-term trend would turn bullish above this level.

FTSE 100 has yet again defended the short-term bullish trend line and a move above the recent swing high at 6880 is what’s needed to flip the short term bias back to bullish from the current neutral stance. Below 6730 would be bearish.

USD/CAD (FXC, quote) has fallen to test support at 1.3360 – the opening price of the last down candle prior to the up move. If the trend is still bullish for this pair, the bulls would want to defend this level. It is possible for both oil and USD/CAD to go higher in tandem, because it is not just about the Canadian dollar, but the US dollar too. The latter will be in focus ahead of the ADP employment report today and other key US data later on in the week, including the nonfarm payrolls report on Friday. The next support below 1.3360 is around 1.3295. Resistance comes in at 1.34 then 1.3455. Bias bullish if these levels break, towards 1.3585 range high.