It was a big day for oil (WTI) as it smashed through support levels and dropped sharply on the charts. This may have come as a surprise for a lot in the market as the drawdown in crude was sharp at -5.08M barrels and normally we would expect a bullish move. Instead the drawdown was met with a large accumulation in gasoline and other crude products which has spooked the market heavily as it's clear that demand is still there despite this recent move. On top of this is the Saudi Arabia and Iran feud which is raging in the middle east, and is currently looking like both will pump as much oil as possible in an effort to undermine one another.

With the recent drops people will have to look very far back on the charts for key level - if this bear run can be stopped right now. Looking at levels from 2004 there is support at 32.09, but even this level is looking very weak given the heavy movement we saw today; driven by a strong USD and weak oil fundamentals. We could see a push soon, and the market will be looking for sub $30.00 barrels of oil which will open up the markets to some serious volatility and big swings.

For the USDCAD it's also looking at further record highs, the US data that came out today put a big dent in any hopes of a reversal and many will now be looking for this bullish run to certainly continue. ADP non-farm payroll data was looking very promising as it came in at 257K which was well above expectations at 195K. This may lead to a more hawkish tone out of the FED if we see a very strong non-farm payroll this Friday, which could lead to further buying of the USD and shake up the global markets. Despite all of this, the CAD can't catch a break as the correlation with oil continues to weigh on it heavily, and many are now expecting the fiscal impact on the Canadian economy to be heavy.

After today's push on key resistance the next level is looking very weary at 1.4195 and certainly it's looking like we could see further pressure higher given the weakness in oil and the Canadian economy as a whole. I do feel that despite the best effort of the technical's, the CAD is really in the hands of oil markets at present and it will be difficult for the USDCAD for some time if you're a bear.  

Lastly, the NZDUSD is starting to pullback after some strong drops over the previous few days, as it sinks down the charts to support at 0.6615. Despite the pullback we are seeing nothing has changed as this looking more and more like profit taking, and I would be surprised to see it sustained in the short term. For traders the 0.6517 support level is still looking like the next target and after today's weaker AUD results I would not be surprised to see it drag further on the NZD as well.

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