USDCAD seems to be tired from its climb, as a double top pattern formed on its 1-hour time frame. Price is still testing the neckline at the 1.3400 major psychological level before conrfirming this reversal signal.
Crude prices jumped in reaction to the latest weekly US crude stockpiles data but then quickly went into reverse gear, before bounce back once again.
Ahead of next week’s talks in Algeria, Reuters reported this morning that Saudi Arabia is apparently willing to reduce its oil output for as long as Iran agrees to freeze its production at current levels.
Oil prices swung wildly into the positive territory yesterday. The rally eventually came to a halt around the $50 handle for Brent and $48 for WTI, and both contracts have been trending lower from these levels until an hour or so ago.
For longer term traders and investors in oil, as we come to the end of another month with the latest weekly oil inventories now posted, it is once again the weekly and monthly charts that provide insight and context for the future trends.
USDCAD has formed lower highs on its 1-hour chart and has been finding support at the 1.3650-1.3700 area, creating a descending triangle chart pattern. Price appears to have found resistance at the top of the formation once more and might be due for another test of support.
For oil prices, the new year could hardly be described as happy, as the relentless decline in prices continues, with December’s pause now starting to fracture, as February’s WTI contract picks up downside momentum.
In my post of 5 days ago I highlighted how a confluence of factors had the potential to drive oil prices even lower, and down towards the $32 per barrel regions, last seen in 2009.
Brent crude oil (BNO, quote) made its way above $110 on Thursday as rising tension in Ukraine raised concerns about supply interruptions.
Brent crude oil fell below $106 to start the week as the Libyan government neared a deal with rebels to reopen several of its largest oilfields. The commodity traded at $105.83 at 6:15 GMT on Monday morning as investors braced for an influx of supply.
