It took an extra day,
but crude oil finally responded to the potential supply disruption that the EU’s
embargo could create. With the downtrend on the daily chart broke, will crude
being to congest or does it have enough momentum to push toward the 50DMA and
then 90.00. Loonie traders will want to keep a close eye with the USD/CAD
hovering just above the 200DMA.
The U.S. Dollar Index and Dow are both
taking back some of Friday’s move but the correction on both is fairly limited.
The continuation of the downtrend in crude oil is pronounced but there is
near-term strength at the 20DMA.
Past performance is not indicative of
future results
Crude
oil has maintained consistent red GRaB candles since May 3. The downtrend that
ensued was strong and seldom offered pronounced bounces and thus corrective
entries like a swing were difficult to set up. With today’s candle, the
downtrend is now broken; the market is now in transition. Last Friday’s risk on
rally sent crude sharply higher and despite the July 1 EU sanctions, it’s not
until today that crude seems to be reacting to the possibility of supply disruptions.
Disruptions alone are not the only
reason for crude’s rally. Optimism over the ECB’s new plan to inject liquidity
into banks and the talk of more monetary policy easing (e.g. Europe and China)
has commodities poised for gains.
The Canadian dollar will be a
beneficiary of a renewed push higher in crude oil. In fact, despite the choppy
price action on the daily time frame, the USD/CAD is moving lower and today –
on the crude oil surge – has broken through the near-term lows just above the 1.0150
major psychological level but also through support at the 127.2% Fibonacci
Extension level at 1.0140.
Past performance is not indicative of
future results
The
daily USD/CAD is still in a “two to four o’clock” chop but this does not mean
that the recent surge in crude is going unnoticed. The pair has sold off
through range lows and seems to have its sights set on a test of the 200DMA.
The move lower can be traded on a
shorter-term intraday chart, my preference (because of the clarity of the 34EMA
Wave) is currently the 60-minute.
Past performance is not indicative of
future results
The
60-minute USD/CAD is moving lower at a “four to six o’clock” angle and this would
open up the possibility for a swing short on a bounce (correction) to the area
between the 20 period SMA close and 34 period EMA low. This entry is valid only
so long as the downtrend is intact on this time frame. The closer prices get to
the 200DMA, look for the downtrend to slow in the face of buying support that is
likely waiting at this level.
As an
active forex trader and Chief Currency Analyst for InterbankFX.com I do write
for a number of sites all over the web and I am happy to say that I will be
posting updates atwww.IBFXconnect.com. MyActivity Boardwill feature the trades from my trading account as well as
intraday commentary.
Start the discussion! Questions?
Comments. Leave it here at the Daily Forex Trading Edge for Raghee to
personally answer. Using the icons at the top of the article to forward this
update to a friend via email, post it on Google or Facebook or simply print it out
for reading later.
Forex trading is one of
the riskiest forms of investment available in the financial markets and
suitable for sophisticated individuals and institutions. The possibility exists
that you could sustain a substantial loss of funds and therefore you should not
invest money that you cannot afford to lose.
Posted By:
Raghee Horner
Raghee Horner, chief currency analyst for IBFX, provides her personal daily trading tips and insights through Dailyforextradingedge.com. An experienced trader with over fifteen years in the markets, Raghee is the co-founder of EZ2Trade Software and has taught her brand of technical analysis and charting strategies to students all over the world. She is an international author and has taught currencies, futures, and equities trading for over a decade.
It took an extra day, but crude oil finally responded to the potential supply disruption that the EU’s embargo could create. With the downtrend on the daily chart broke, will crude being to congest or does it have enough momentum to push toward the 50DMA and then 90.00. Loonie traders will want to keep a close eye with the USD/CAD hovering just above the 200DMA.
The U.S. Dollar Index and Dow are both taking back some of Friday’s move but the correction on both is fairly limited. The continuation of the downtrend in crude oil is pronounced but there is near-term strength at the 20DMA.
Past performance is not indicative of future results
Crude oil has maintained consistent red GRaB candles since May 3. The downtrend that ensued was strong and seldom offered pronounced bounces and thus corrective entries like a swing were difficult to set up. With today’s candle, the downtrend is now broken; the market is now in transition. Last Friday’s risk on rally sent crude sharply higher and despite the July 1 EU sanctions, it’s not until today that crude seems to be reacting to the possibility of supply disruptions.
Disruptions alone are not the only reason for crude’s rally. Optimism over the ECB’s new plan to inject liquidity into banks and the talk of more monetary policy easing (e.g. Europe and China) has commodities poised for gains.
The Canadian dollar will be a beneficiary of a renewed push higher in crude oil. In fact, despite the choppy price action on the daily time frame, the USD/CAD is moving lower and today – on the crude oil surge – has broken through the near-term lows just above the 1.0150 major psychological level but also through support at the 127.2% Fibonacci Extension level at 1.0140.
Past performance is not indicative of future results
The daily USD/CAD is still in a “two to four o’clock” chop but this does not mean that the recent surge in crude is going unnoticed. The pair has sold off through range lows and seems to have its sights set on a test of the 200DMA.
The move lower can be traded on a shorter-term intraday chart, my preference (because of the clarity of the 34EMA Wave) is currently the 60-minute.
Past performance is not indicative of future results
The 60-minute USD/CAD is moving lower at a “four to six o’clock” angle and this would open up the possibility for a swing short on a bounce (correction) to the area between the 20 period SMA close and 34 period EMA low. This entry is valid only so long as the downtrend is intact on this time frame. The closer prices get to the 200DMA, look for the downtrend to slow in the face of buying support that is likely waiting at this level.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
Start the discussion! Questions? Comments. Leave it here at the Daily Forex Trading Edge for Raghee to personally answer. Using the icons at the top of the article to forward this update to a friend via email, post it on Google or Facebook or simply print it out for reading later.
Forex trading is one of the riskiest forms of investment available in the financial markets and suitable for sophisticated individuals and institutions. The possibility exists that you could sustain a substantial loss of funds and therefore you should not invest money that you cannot afford to lose.
Raghee Horner