WTI Crude Hangs Tough-Support In View For The USD/CAD
Shain Vernier • 2 min read
The gains posted by WTI crude oil over the past six months have been a breath of fresh air to the Canadian economy. Energy exports play a large role in Canada’s economic health, led by crude oil and natural gas. A gain of over $15 per barrel in oil valuations during this period have given Loonie backers reason for optimism.
Thus far today, February WTI crude oil futures have traded in a tight range, from $60.10 to $60.74. It appears as if the key psychological level of $60.00 may become robust support. This is a bullish signal, as crude oil has resisted a correction for the first trading session of 2018.
Kudos to all who capitalized upon the short trading signal for the USD/CAD earlier in the session. For a full breakdown of the setup, check out my colleague Skerdian’s live market update from earlier today.
On the daily timeframe, the USD/CAD is approaching several important support areas:
- Support(1): Big round number, 1.2500
- Support(2): 50% retracement Sept. low/Dec. high, 1.2490
- Support(3): 62% retracement Sept. low/Dec. high, 1.2388
Overview: As of this writing, price is entering a consolidation phase on the intraday time frames around 1.2500. In the event that sellers continue to apply pressure, the 50% macro retracement level (1.2490) will come into play.
At least for now, I am not fond of taking a counter-trend long. A continued sell off toward the 62% retracement (1.2388) creates a better setup for a position long entry around 1.2400.
I will be looking to buy in from 1.2405 using an initial stop below 1.2350. This is a position trade and is likely to take a considerable period to hit the profit target. If it goes live in the coming sessions, be sure to check back for tips on how to limit risk while maximizing reward.
As always, trade smart and for tomorrow!