USDCAD Short-Term Pullback (Nov 16, 2016)

Applying the Fib tool on the latest swing low and high shows that the 50% level lines up with the broken resistance and area of interest.

Stochastic is heading lower so a larger correction might be due until the 61.8% level. However, the oscillator is already in the oversold region so sellers are tired and might let buyers take over. If so, the Fib levels could keep losses in check and push the pair back up to the swing high.

The 100 SMA is above the longer-term 200 SMA on this time frame, indicating that the path of least resistance is to the upside. The gap has widened, reflecting stronger bullish momentum. Price appears to be breaking below the 200 SMA dynamic support, though, so a break below the Fibs could take USDCAD to the next support at the swing low 

The Canadian dollar got a boost from stronger oil prices when newswires showed that the OPEC Secretary General is scheduling meetings with energy ministers from Iran, Venezuela, Ecuador, and Russia to come up with an output deal before the official meeting later this month.

However, a few countries have already expressed hesitation about cooperating and are even ramping up production ahead of an anticipated cap. With that, the cartel could still fail to come up with an agreement, possibly leading to another wave lower for crude oil.

Meanwhile, the US dollar has extended its gains after retail sales data beat expectations for October and saw upgrades for the previous month. CPI and PPI are still lined up for the week, along with a speech from Fed Chairperson Yellen.

By Kate Curtis from Trader's Way