Buyers don't get a push higher on larger draw down
The oil draw down in oil inventories was greater than expectations and the price of crude moved back above the $44.00 level, but the comments that the drop is expected this time of year. So no big deal. The price of oil is back in the $43.70-80 area now.
For the USDCAD, the pair was up testing the high from June 15 at 1.33075, and the 38.2% of the move down from the June 9th high at 1.33059. The high reached 1.33094 today and backed off before the data.
The data sent the price lower (CAD higher), and back below the 200 hour MA at 1.3384. Earlier today, the price of the USDCAD finally closed above the 200 hour MA (first since June 9th). Although the price dipped back below the MA line on the data, the price is waffling above and below as traders weigh the bullish and bearish options.
Although the price of crude is down near lower levels, the USDCAD has been under pressure since June 12th on the back of a more hawkish BOC comments from Wilkins and Poloz.
This week, the price of the pair started to pay more attention to the crude oil price (lower CAD, higher USDCAD). So there is a fundamental battle going on.
Technically, the 200 hour MA will play a role (I believe). A move above the 38.2% at 1.33059 will also be eyed along with the 200 day MA at 1.3336. The 200 day MA was broken on June 12th/13th and has not retested the level since.
On the downside, if the sellers start to move away from the 200 hour MA, the 1.3256-62 would be eyed along with the 100 hour MA at 1.32488 currently. Breaks below will be more bearish for the pair with 1.3108-11 another key floor area to get to and through.
Traders are at a decision point at the 200 hour MA.
