Technical analysis of crude oil
Crude oil rose in early April after the unexpected OPEC+ announcement to cut production to stabilize energy markets. The decision briefly pushed WTI futures to their best levels since November 2022, but the bullish momentum faded quickly when prices were unable to remove cluster resistance in the $83.50 region.
The chart below shows how oil has fallen aggressively in recent weeks after its failed attempt to regain its 200-day simple moving average. In fact, selling accelerated today when the $74.00 barrier was cleared, a move that pushed the commodity to its lowest level since late March.
After Tuesday’s decline, oil appears to be sitting above trendline resistance turned support at $71.50 – a key technical area to watch in the near term. Bulls do not want to see prices slide below this floor as a breakdown could pave the way for a retest of $70.25 before a move towards $66.40.
On the flip side, if traders can defend the dynamic support at $71.50 and trigger a bullish turn, the initial resistance at $74.00 will emerge. For more strength, attention turns to the 50-day simple moving average near $76.60.
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Crude oil future technical chart
Crude oil futures chart created using TradingView
Technical analysis of the USD/CAD pair
The oil sell-off, in concert with the weak sentiment, has been a headwind for the Canadian dollar – a high-beta currency sensitive to global growth concerns and energy market developments. With crude oil prices falling in recent days, USD/CAD has regained its footing, rising from 1.3300 to 1.3625 in less than three weeks, with the exchange rate now above the 50-day simple moving average.
In general, the outlook for USD/CAD has become more positive, but to be confident of the bullish thesis, we need to see the pair break above the cluster resistance at 1.3650/1.3670, an area where the short-term bearish trend line converges with 61.8% Fibonacci retracement. For retreat March-April. A move above this ceiling will defend a retest of the psychological level 1.3700, followed by 1.3865.
On the other hand, if the sellers regain decisive control of the market and trigger a bearish reversal, the initial support is near the 50-day simple moving average. However, if this floor is breached, sellers may dare to challenge the trend line support that intersects 1.3500. With further weakness, the 200 day simple moving average could become the next target for the downside.
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Technical chart of the USD/CAD pair
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