Crude Oil eyes more upside, USD/CAD could extend lower

Gregor Horvat Wavetraders

Hey everyone, I hope you're doing well. In this article, I want to discuss crude oil and USDCAD.

As you know, crude oil is still in a very nice recovery mode. In fact, we can see that crude oil has room for further strength here since it completed an ABC pullback at around $74.50, and it looks like more upside is in the cards, at least towards $95, maybe even the $100 area.

So while energy is trading to the upside, we know that the Canadian dollar could do pretty well, and this is even more important for the bearish trend on USDCAD, especially if we consider the recent strong leg down in the dollar across the board.

When looking at USDCAD, we therefore anticipate more weakness. In fact, looking at the subdivisions, it seems like we are still in the middle of this bearish impulsive cycle, so there could be opportunities on the short side after a fourth-wave rebound. Looking at some key levels, maybe wave three is coming to an end down here at the 161.8% extension, but resistance on a rebound is at 1.3840–1.3911, which could be quite an interesting and attractive area to look for potential opportunities on the short side while the market trades below the important 1.4000 round figure.

USDCAD bearish elliott Wave pattern — USDCAD

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Author

Gregor Horvat

Wavetraders

Experience Grega is based in Slovenia and has been in the Forex market since 2003.

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