Bullish break in Oil may push USD/CAD lower to leg D of Cypher
On the right hand side we have USD/CAD pair with a cypher plotted on it. Leg D stands at 1.2616. On the right hand side, we have WTI oil daily chart, which shows prices struggling to take out $50.18.
The message is pretty clear. If WTI oil sees a day end closing above $50.18 it would not only negate the possibility of double top formation, but would also signal continuation of rally. In such a case, there is little in way for USD/CAD to drop to 1.2616.
However, one needs to respect the levels in WTI. If the day end closing is not above $50.18, we could head lower towards double neckline, especially since RSI is overbought on hourly, 4-hour and daily time frame.
The message is pretty clear. If WTI oil sees a day end closing above $50.18 it would not only negate the possibility of double top formation, but would also signal continuation of rally. In such a case, there is little in way for USD/CAD to drop to 1.2616.
However, one needs to respect the levels in WTI. If the day end closing is not above $50.18, we could head lower towards double neckline, especially since RSI is overbought on hourly, 4-hour and daily time frame.
