USDCAD and USOIL are inversely correlated - meaning when USDCAD goes up, OIL goes down (and vice versa).
In the chart we have USOIL at the top and USDCAD inverted at the bottom. It appears that USDCAD is ahead of Oil by around a month or so. When USDCAD started it bearish wave, USOIL was starting its bullish wave (after a month).
We recently saw a third touch of a trendline for USDCAD and price rejected nicely and USDCAD is now bullish. We haven't yet seen that for USOIL. We're still yet to touch the trendline for the 3rd time, which will very likely follow USDCAD inversely.
FUNDAMENTALS Fundamentally we have reason to believe that in early Feb Oil prices will head lower. Opec Plus is expected to adhere to its current strategy at its February 2nd Meeting, raising its March production target to 400,000 barrels per day. More supply = Lower prices = USOIL Shorts. It just so happens that the third touch of the trendline for USOIL falls around the Feb 2nd - which would give us a perfect reason to short.
In conclusion, we have the following reason to short OIL: - USDCAD is leading the way a month early whilst USOIL follows - USDCAD has already hit the trendline for the 3rd time and is bullish - USOIL is about to hit the trendline for the 3rd time and turn bearish - If the OPEC meeting goes well and they adhere to the 400k barrels a day, we will see USOIL move lower.
What do you guys think? Do you agree? Did you know about this correlation? Let me know below.
Finally got a sell signal on the 60M, short at 87.50. This could finally be it.
mumi3
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This looks like touching for 4th time :D
efrainsilva51
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mind blown
Solldy
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Great chart
Mundane29
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Mr Wick is the BEST!
Divergencify
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Is top already made? Cheers
Deringer
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so what
tradertech6
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This market is insane, 30 tick swings in 2-3 minutes.
MAKH83
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Iran deal could be done by the end of Feb so hopefully this plays out nicely. Thanks for the Analysis.
giantel
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Great observation, probably a bounce to the trendline up to 90 very likely, but we dont know yet, if after 90 bounce, retraces to 85 strong level and then push up back to 100,,, Good to see your expertise on this Many thanks