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USD/CAD: Uptrend intact after US active oil rig count rose
By Xinyang
USD/CAD to fresh 2-month lows after Baker Hughes reported US active oil rig count rose last week. US oil rig count climbed 14 to 371 in the week ending July 16, marking the fourth consecutive week of increases.
“The pace of rigs coming online doubled week over week,” said Tyler Richey, co-editor of The 7:00’s Report, citing data Friday from Baker Hughes Inc.
The numbers are “in-line with our view that the pace of U.S. production declines will continue to moderate in the near term, and may even begin to rise in the months ahead,” Richey said. That is “obviously a bearish development for the price of oil in the medium term.”
Technical Insights:
Short term (15min) chart of USD/CAD:
Trend Analysis: Bullish (50 SMA above 200 SMA).
Levels Analysis: Critical support zone at 1.30240 - 1.30550 and resistance at 1.31850.
Takeaway: Both moving averages are showing a bullish momentum, and the price is trading within a perfect up trending bullish channel. With the bearish sentiment in oil due to the gradual increase in supply by oil rigs, I am expecting USD/CAD to continue it's uptrend in the short term. However, a good long opportunity will be to wait for the price to pull back near the bottom uptrend channel. If the price takes down the supporting zone from 1.30240 - 1.30550, caution should be taken as the uptrend channel is compromised and may be losing its upward movement.
Long term (Daily) chart of USD/CAD:
Trend Analysis: Bearish (50 SMA below 200 SMA).
Levels Analysis: Critical support at 1.26730 and resistance at 1.31820
Takeaway: Price action is currently trading within an ascending triangle formation pattern, with a bearish pin bar candlestick forming with confluence at the resistance level of 1.31820. My temporary bias is to the down side, towards the supporting uptrend line or critical support at 1.26730. However, if the price is to take out the critical resistance level of 1.31820, I am expecting a huge upside. Base on the concept of measure rule of chart patterns, an upward momentum towards 1.38470 can be expected.
“The pace of rigs coming online doubled week over week,” said Tyler Richey, co-editor of The 7:00’s Report, citing data Friday from Baker Hughes Inc.
The numbers are “in-line with our view that the pace of U.S. production declines will continue to moderate in the near term, and may even begin to rise in the months ahead,” Richey said. That is “obviously a bearish development for the price of oil in the medium term.”
Technical Insights:
Short term (15min) chart of USD/CAD:
Trend Analysis: Bullish (50 SMA above 200 SMA).
Levels Analysis: Critical support zone at 1.30240 - 1.30550 and resistance at 1.31850.
Takeaway: Both moving averages are showing a bullish momentum, and the price is trading within a perfect up trending bullish channel. With the bearish sentiment in oil due to the gradual increase in supply by oil rigs, I am expecting USD/CAD to continue it's uptrend in the short term. However, a good long opportunity will be to wait for the price to pull back near the bottom uptrend channel. If the price takes down the supporting zone from 1.30240 - 1.30550, caution should be taken as the uptrend channel is compromised and may be losing its upward movement.
Long term (Daily) chart of USD/CAD:
Trend Analysis: Bearish (50 SMA below 200 SMA).
Levels Analysis: Critical support at 1.26730 and resistance at 1.31820
Takeaway: Price action is currently trading within an ascending triangle formation pattern, with a bearish pin bar candlestick forming with confluence at the resistance level of 1.31820. My temporary bias is to the down side, towards the supporting uptrend line or critical support at 1.26730. However, if the price is to take out the critical resistance level of 1.31820, I am expecting a huge upside. Base on the concept of measure rule of chart patterns, an upward momentum towards 1.38470 can be expected.
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By Xinyang
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