As oil stopped rising, Loonie stopped falling. The surge of oil might have been based just on guess as a record decline in rigs seeking oil boosted speculation that production will soon slow and as refineries used more crude after seasonal maintenance. Nevertheless, OPEC increased output by the most in four years even as U.S. shale output is poised to fall. These mixed signs are likely to whipsaw prices amid increased volatility, according to oil historian and economist Daniel Yergin, and it did.
Today’s news: U.S Unemployment Claims est. 288k vs. 294k previous.
From a technical point of view, looking at a daily time-frame, Loonie is still strongly bearish. MACD keeps forming lower bars below the line, RSI moves below downward trend line towards 30 zone and 50 SMA is looking at the bears.
On hourly time-frame, for this week, price has been moving in consolidation between Fibo 38.2% @ 1.22 and previous week’s Pivot line at 1.2324. However, bearish pressure is visible on H1 time-frame as well, having 200 MA moving down and 50 MA turning to follow it as well.
For time being, with no clear trend and with oil ringing, entries for Loonie are not advisable. However, bearish pressure is still there and it is only a matter of time until bears will be released again and the view of Fibonacci’s 50% at the psychological 1.20 level should still be kept in mind. A clear brake of Fibo 38.2% and a support from oil would confirm it. Alternatively, with strong U.S data and falling oil, Loonie might test the long lasted 1.239 support zone (blue rectangle), which now turned into resistance zone.
Support and Resistance levels:
R2 / Zone of 1.239
R1 / Week’s Pivot l. @ 1.2324
S1 / Fibo 38.2% @ 1.22
S2 / Fibo 50% @ 1.20
Author: Edmundas Povilavicius
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