USD/CAD Surges on Crude Oil Inventories Surprise
- USD/CAD Surges on U.S. Crude Oil Inventories Surprise
- Technical Support Found at the 10 Day EMA at 1.3509
- IG Client Sentiment Positive at +1.12; 52.8% Net-Long
The USD/CAD is breaking out to new weekly highs this afternoon, with the pair reacting positively to the release of U.S. Crude Oil Inventory data. Expectations for U.S. Crude Oil Inventories (JUN 02) were set at -3.25 million barrels but were released at an actual +3.29 million barrels. This news has shocked the market, sending crude oil prices lower and the negatively correlated USD/CAD currency pair higher.
With the pair rebounding off of early lows, the USD/CAD has now advanced as much as 99 pips for Wednesday's trading. This move is technically significant, with the pair now trading back above its 10 day EMA (exponential moving average). This line is found at 1.3509, and a close above this value may signify the pair trading back in the direction of its long-standing uptrend. Traders should note that the USD/CAD’s 200 day MVA (simple moving average) remains below present price action at 1.3362.
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USD/CAD Daily Chart & Averages
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Despite today’s aggressive rise in price, sentiment totals for the USD/CAD remain relatively neutral. Currently IG Client Sentiment is reading at +1.12. This value suggests that 52.8% of traders are net-long the USD/CAD. If the USD/CAD continues to trend higher, traders should next look for sentiment figures to flip negative. It should be mentioned here that the number of traders net-long the market has actually decreased 6% from yesterday. If prices trade lower however, traders should look for sentiment figures to remain positive and potentially move to new extremes of +2.0 or more.
--- Written by Walker, Analyst for DailyFX.com
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