Oil prices extended losses after Russia announced it was boosting its output and US President Trump increased pressure on the OPEC to do the same. Volatility is expected to remain high in the near-term, due to the recent geopolitical developments and uncertainty around Saudi-Arabia´s and the UAE´s ability to make up for Iran´s reduced output.
The short-term charts suggest that USOIL is slightly oversold, but the commodity is not showing any signs of a recovery yet. Bulls will be closely watching the $60.80 level - which is where the 200 DMA and 23.6 % Fibo of the 2019 rally lie. A clear break below that level may intensify the pressure on USOIL.
As the Oil rally has started to fade, speculators are increasingly looking at USDCAD. The Canadian Dollar was benefiting from Oil strength, and didn´t feel the heat as the Australian and New Zealand Dollar did. However, a sudden decline in Oil prices could scare CAD bulls, and potentially trigger a short squeeze in USDCAD. The next big level to watch lies around 1.3530 - which is the 76.8 % Fibo of the 2019 decline, and has acted as key level of resistance several times before.
EURCHF has bounced off the 200 DMA and an increase in risk appetite might benefit this currency pair. The RSI is not yet in overbought territory, and the market sees the overall short-term uptrend as intact. Resistance is seen at 1.1420, followed by 1.1475 (April high).
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Stocks recover as Fed Chair Powell says, "The job is not done"; Oil's raging bull and FX's roaring commodity currencies