Oil moved higher but back down after inventory data. CAD strengthens and then falls in reaction
The USDCAD dipped to new session lows on the back of the higher than expected draw down of inventories in Crude (oil traded as high as $52.76), but the price of oil fell back down (trading at $52.45 currently) and the USDCAD rallied back higher.
For the USDCAD, the pair fell to a low at 1.3078. That level got to within 7 pips of the key 200 day MA at 1.3071. That MA is a key technical level. The price has not traded below the 200 day MA since October 20. Earlier today the price fell below a trend line support line on the daily chart at the 1.3092 level. We currently are testing that MA line on the rebound higher. A move above that line, should solicit more buying as traders view the break into support holding.
Looking at the hourly chart for this pair, a topside trend line was broken in late trading yesterday but the target area - between 1.3143-51 could not be reached/breached in the Asian Pacific session today (see yellow area in the chart below) That helped to send the pair lower in the London session.
