The sharp drop in energy markets on Friday was a demonstration of the influence that economic issues in Washington can exert on oil prices. Near-term trading direction will thus be influenced one way or the other by what happens with fiscal cliff negotiations over the weekend and between the Christmas and New Year’s holidays
Merry Christmas
USDCAD breaks above the upper line of the price channel on 4-hour chart, suggesting that lengthier consolidation of the downtrend from 1.0055 is underway. Range trading between 0.9824 and 0.9920 would likely be seen in a couple of days. Resistance is at 0.9920, as long as this level holds, the downtrend could be expected to resume, and another fall towards 0.9700 is still possible, and a breakdown below 0.9850 could signal resumption of the downtrend.
Natural Gas traded higher settling $3.418 up $0.06 1.8%. The curve was weaker, 13/16 down $0.08 (16-20 up btwn $0.08-$0.13). Hub cash was firmer, ~$0.08 back this morning, Z-6 up $0.15 to $3.55. The 12z was warmer Midwest and South and much cooler West Coast/Plains during the 6-10 day.
Daily Energy Report – The oil markets may trade higher again in the near-term, however, the fundamental picture still remains somewhat weak at the moment.
Wednesday’s FOREX Market Analysis USDCAD remains in downtrend from 1.0055, the price action from 0.9824 is likely consolidation of the downtrend. Resistance is at the upper line of the price channel on 4-hour chart, as long as the channel resistance holds, the downtrend could be expected to resume, and another fall towards 0.9700 is still possible.
WTI futures bumped up against resistance from the 50-day MA at the day’s high yesterday, but the rally was assisted by favorable news on the Seaway pipeline and some progress made on the fiscal cliff. A breakout above the 50-day will likely require further progress on cliff negotiations as well as signs of economic growth and improving oil fundamentals.
AUDUSD moves sideways in a range between 1.0507 and 1.0585. Support remains at the lower line of the price channel on 4-hour chart, as long as the channel support holds, the sideways move could be treated as consolidation of the uptrend from 1.0287, and another rise to test 1.0624 (Sep 14 high) is still possible after consolidation, only a clear break below the channel support could signal completion of the uptrend.
We are looking at the USDCAD this morning.
Long Term Analysis Brief indicate USDCAD’s downward movement from 1.0055 extends to as low as 0.9824. Further decline could be seen after a minor consolidation, and next target would be at 0.9700 area. Resistance is at 0.9900, as long as this level holds, the downtrend will continue.
