We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
  • How can confidence in trading help with avoiding #FOMOintrading? Find out from @WVenketas here: https://t.co/MY7j9ISn4S https://t.co/n7XwfiDZz2
USDCAD Bullish Range Breakout Eye as Crude Oil Prices Hit Monthly Low

USDCAD Bullish Range Breakout Eye as Crude Oil Prices Hit Monthly Low

2019-05-29 17:30:00
Christopher Vecchio, CFA, Sr. Currency Strategist
Share:

Crude Oil Price Talking Points:

Looking for longer-term forecasts on Oil prices? Check out the DailyFX Trading Guides.

Ahead of the weekly US Department of Energy inventory figures due out tomorrow, crude oil prices have taken a drop into fresh monthly lows amid rising global growth concerns. With the US-China trade war deepening with no end in sight, evidence is starting to mount that global trade has started to cool off. The US is not immune to this trend either: after posting a 3.2% annualized growth rate in Q1’19, the Atlanta Fed GDPNow growth tracker sees Q2’19 US GDP in at 1.3%.

While the geopolitical backdrop is already tense given conflicts between the US and Iran, rising oil inventories have been the predominant force driving energy markets in recent weeks. The most recent oil inventory report for the week ended May 17 showed a larger than expected build in supplies, with crude oil inventories jumped by 4740K barrels versus an expected decline of -1283K.

With the fundamental backdrop proving precarious in the near-term, the technical outlook for crude oil prices has become treacherous as well. In our last update, we warned of a potential bearish outside engulfing bar forming on the weekly timeframe; this manifested with a close below 60.63 last Friday. As longer-term technical signals suggest more weakness ahead, the daily chart suggests that momentum is firmly pointed to the downside at present time.

Crude Oil Technical Analysis: Daily Price Chart (April 2018 to May 2019) (Chart 1)

oil price, oil technical analysis, oil chart, oil price forecast, oil price chart

The daily price chart showcases the firming bearish momentum in crude oil prices. Extending further below its daily 8-, 13-, and 21-EMA envelope, crude oil’s drop to a fresh monthly low constitutes a continuation effort lower after we said that “a return to the May 2019 low at 60.02 should not be ruled out over the coming sessions” in our last update. Both daily MACD and Slow Stochastics are trending lower in bearish territory. To this end, with a close below 60.02, crude oil prices may be pointed for the 38.2% retracement of the 2018 high-low range at 55.24. A bearish bias is appropriate until crude oil prices return back above the daily 8-EMA (currently at 59.74).

IG Client Sentiment Index: Crude Oil Price Forecast (May 29, 2019) (Chart 2)

oil price, oil technical analysis, igcs, ig client sentiment index, igcs oil

Crude oil: Retail trader data shows 61.7% of traders are net-long with the ratio of traders long to short at 1.61 to 1. In fact, traders have remained net-long since May 22 when crude oil prices traded near 6107.9; price has moved 6.5% lower since then. The number of traders net-long is 1.1% lower than yesterday and 21.0% higher from last week, while the number of traders net-short is 4.8% higher than yesterday and 23.6% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long crude oil prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed crude oil trading bias.

USDCAD Technical Analysis: Daily Price Chart (April 2018 to May 2019) (Chart 3)

usdcad price, usdcad technical analysis, usdcad chart, usdcad price forecast, usdcad price chart

As was the case last week, with crude oil prices dropping, the oil-sensitive Canadian Dollar has seen an uptick in selling pressure. It still holds that, since the close on April 23, USDCAD prices have closed every session between 1.3377 and 1.3521. Today, however, after the May Bank of Canada rate decision, and in concert with the drop in crude oil prices, USDCAD may finally be attempting to breakout of its five-week long consolidation.

Should USDCAD close above 1.3521, we would again be looking at topside breakout opportunity, while a drop below 1.3377 would constitute a downside break of the consolidation as well as a break of the uptrend from February, March, and April 2019 swing lows.

IG Client Sentiment Index: USDCAD Price Forecast (May 29, 2019) (Chart 4)

igcs, ig client sentiment index, igcs usdcad, usdcad price chart, usdcad price forecast, usdcad technical analysis

USDCAD: Retail trader data shows 26.9% of traders are net-long with the ratio of traders short to long at 2.72 to 1. In fact, traders have remained net-short since May 22 when USDCAD traded near 1.34326; price has moved 0.8% higher since then. The number of traders net-long is 28.6% higher than yesterday and 30.8% lower from last week, while the number of traders net-short is 42.4% higher than yesterday and 78.0% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDCAD prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDCAD-bullish contrarian trading bias.

FX TRADING RESOURCES

Whether you are a new or experienced trader, DailyFX has multiple resources available to help you: an indicator for monitoring trader sentiment; quarterly trading forecasts; analytical and educational webinars held daily; trading guides to help you improve trading performance, and even one for those who are new to FX trading.

--- Written by Christopher Vecchio, CFA, Senior Currency Strategist

To contact Christopher Vecchio, e-mail at cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

View our long-term forecasts with the DailyFX Trading Guides

provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.