The Directional Bias in crude oil has continued to pressure the market lower as the 100.00 figure looms overheads as resistance. This psychological level is the key for the bears - keeping the sentiment negative - but getting above this level is key for the bulls in order to attract buying momentum. Never underestimated the power of a whole round number…
The 34EMA Wave is moving lower at between “four and six o’clock” on the daily chart. With the fears of a slowdown in China, with fears of a more pronounces correction in U.S. equities, and with the U.S. Dollar continuing to find support above 76.00 there is potentially more downside to come in commodities.
Therefore as I set up swing shorts on the bounces between 99.50 and 101.00 in crude oil, I am also looking for exhaustion and breakdowns in the AUD/USD and will buy pullbacks in the USD\/CAD.
The USD/CAD daily has a bullish Directional Bias so I will look for pullbacks on not only the daily but also the 240-minute time frame.
The AUD/USD is still consolidating although has pushed past recent lows. The 240-minute offers a swing off the 34EMA Wave while the daily is setting up a momentum breakdown if prices trade through 1.0480.
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