The Brent/WTI rollercoaster – Forex trading CAD/CHF descending triangle [Video]

In today’s Market Outlook, let’s take a look at Forex Trading on the FTSE100, GBP/USD, USD/CHF, USD/CAD, Brent, and WTI Crude Oil.

Just a reminder that these videos are intended as educational, we are only observing current market conditions, and these are not to be considered as trading advice.

Last time we spotted a falling wedge on WTI and Brent Crude Oil, but as I always say, fundamental analysis takes precedent over technical analysis, especially in times of war.

If we look at the charts on crude oil, they more resemble rollercoasters than financial information, but that’s where we are.

The reason is obvious: Is the Strait of Hormuz open?  Or is it closed?

We never know what the truth is half of the time, so make sure you triple-check before opening a trade on WTI or Brent crude.

And you can see what happened to the price of Brent when an Iranian cargo ship was disabled by the US Navy.

Even though the Strait is still shut, prices are slowly falling and we have a gap to follow.

If we follow the upper trend line, and we get some good news out of the Middle East, we should see price action falling.

The reason I mention this is because, under normal circumstances with slightly falling crude prices and lower-than-expected Canadian CPI, CAD should be falling.

However, these figures are not enough, and the weaker USD, T-Bill yields, and the political chaos in Washington are actually helping other currencies. 

We see this big drop and CAD strength, but we will watch this lower trend line and a very oversold stochastic oscillator.

If we do get some CAD weakness, we will also watch CADCHF, where we have a very overbought stochastic oscillator and what might be a symmetrical pennant, but more likely a descending triangle.

If you want to trade USD pairs, like USDCAD, watch out for US Retail Sales news today.

And, we see a lot of UK data every day this week, including unemployment, CPI, manufacturing PMI, and retail sales.

GBP is generally weak against all other currencies except JPY.

There are many reasons for that, especially the idea that the BoE will be lowering rates, but we don’t know exactly when.

Inflation isn’t pushing the pound, and if tomorrow’s UK CPI is low, we could see it fall further.

The UK economy may be faltering, which is never good for GBP.

Also, many investors and funds, who were long pound, are now taking profit.

And, finally, the FTSE100, like most global indices, is on a tear, so UK assets are being shifted from cash into equities.

This is a normal correlation for the Pound Sterling.