Stick a 100 ticks on oil, take a hundred off of USDCAD
Give or take a few pips the loonie is walking hand in hand with oil. WTI is up nearly a buck from the low and USDCAD is down nearly 100 pips from the highs.
We're seeing the same action around the $51 mark that we saw around the $50 mark, where the price is trying to break but finding it tough.
WTI daily chart
Should we break, we've got minor trendline resistance at 53.00 and a much stronger level at 54.00/20. A measure of the rally is that we still haven't come close to the 38.2 fib of the 2014 drop.
This 51 dollar point could be the difference between pushing higher or putting in a very strong looking double top alongside the high made last Oct.
For the lockstep loonie, we've got what could be a decent support level around 1.2685/90. With natural big figure support it could well be enough to stop further downside, unless oil does smash through up through 51.00 but even then, it's likely to be a tough level to get through.
USDCAD daily chart
Looking at the chart the 1.2600 is right where I would expect to see traders having one last go at keeping the price away from the 1.2460 low. That level could be in serious trouble if 1.26 fails. If it does then could well be having a crack at the 50.0 fib of the 2011 rally at 1.2047
USDCAD weekly chart
There seems no end to the oil rally but it's facing a big test. There's plenty in the balance for both it and the CAD.
