The Dollar is looking bearish to start the week and as a result, USDCAD is also looking to head lower. Conversely, US Oil is gearing up for a rally to this year’s high.
Traders should expect the Dollar to revisit 92.00 at some point this week. Bears have once again taken control of the hourly time frames. Among all the majors, USDCAD has taken the brunt of this bearish pressure. After creating a new quarterly high last week, USDCAD is down -150 pips to start this week. More losses can be expected if the price breaks the next low.
Being inversely correlated with USDCAD, Crude (US Oil) should push higher. Price was able to print two hammers on the daily time frame to close out last week. Today’s daily candle will most likely close as a hammer as well, suggesting a possible next leg up. The next target for Oil will naturally be this year’s high of $77 per barrel.
Last week’s Canadian unemployment was better than expected, and so that should also help USDCAD head lower and Oil higher. Trade entries could be expected later during the London session when the volatility picks up.
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