Summary:

• Oil extends gains to hit $80 a barrel
•  USDCAD at pivotal level
•  Mixed US data with initial jobless rising but Philly fed beats

There’s been more upside seen in the price of crude today with Oil finally hitting the psychological level of $80 a barrel. The market has extended the rally seen in the last few months and today’s high marks the highest level since November 2014. An inverted hammer that was printed on Monday offered some hope to bears that the run higher may be over, but after taking out the high at 79.45 price has continued to rise. Price has been riding along the upper bollinger band for quite some time now with pull back to the moving average being bought pretty aggressively. 

 The price of Oil has been trading up against the upper bollinger band for quite some time now, but after negating Tuesday’s inverted hammer it shows little sign of turning lower anytime soon. Source: xStation

The Canadian dollar could be on trader’s radars in the coming couple of sessions before the week is out with tomorrow’s CPI and retail sales figures from Canada the stand out release for Friday. This afternoon we had some 2nd tier data with the Canadian ADP employment change coming in at 30.2k, below the prior of 42.8k but the prior was subsequently revised up to 59.3k. The previous reading which was for the month of April was the highest since last July and suggests the labour market is doing pretty well.

 USDCAD and Oil have exhibited a fairly strong inverse relationship in recent trade and if Oil continues to rise then USDCAD could fall further. Source: xStation

Their Southern neighbour has also just released its own jobs data with the US initial jobless claims rising to 222k from 211k prior, against consensus forecasts of 216k. The rise here could be seen as ever so slightly negative but given that it remains close to its lowest level in several decades it is hardly concerning. At the same time the Phlly Fed manufacturing index came in at 34.4, far better than both the 21.1 forecast and the 23.2 prior.  

 The convergence of the 8 and 21 EMAS could suggest that the USDCAD is at a pivotal point. Source: xStation

Looking at a daily chart of USDCAD we can observe that the 8 and 21 EMAs have converged to the point where they are touching. This means they could be on the verge of printing a bearish cross and if price takes out the recent lows around 1.2732 then a cross will surely print and a deeper decline may lie ahead. On the other hand, should price move higher form here then the EMAs may remain in a positive orientation and price could then push higher. The moves in Oil and tomorrow’s Canadian data could well prove decisive as to which way the market goes from here.