(Reuters) – Oil prices fell from eight-week highs on Tuesday, pressured by a stronger dollar and uncertainty about an economic recovery.

U.S. crude futures for April fell 38 cents to settle at $81.49 a barrel, after reaching a low of $80.16 a barrel earlier. In London, North Sea Brent crude oil futures slipped 56 cents to settle at $79.91 a barrel.  A stronger dollar makes dollar-denominated commodities, such as crude oil, more expensive for holders of other currencies.

USDCAD touched down to 1.0235 support overnight and bounced up to 1.0275 with good amount changing hands around 1.0260-65 area. With above the reasoning to limit further CAD gains, the daily oscillators suggesting the bearish momentum decreasing and a possible squeeze on its way with Slow Stochastic suggesting a buy starting from an oversold situation.  With 1.0250-55 bringing intraday support, 1.0225 should be bottom of the day to let USDCAD turning around and printing 1.0435 in short term. Worth to bear in mind the 55 Days SMAVG at 1.0470.

Düşler görüyorum uykularımda,
Beni korkutan düşler…
Sırtımdan soğuk terler akıtıp,
Uyanınca hatırlayamadığım
Garip düşler…

Hayal kırıklıklarımın eseri,
Çaresizliğimin nedeni
Gençliğimin esiri
Garip düşler…

Stocks and commodities rose as reports showing improvement in the U.S. job market and service industries bolstered investor optimism and Greece announced plans to reduce Europe’s biggest deficit. Treasuries fell and the dollar weakened.*

EURUSD broke the good resistance at 1.3660 after a higher daily close and printed the overnight highs at 1.3736.  Daily momentum indicators suggesting that the bearish momentum and positioning is off in short term and the pair may continue to extend the gains up to 1.3860-65 resistance to test the topside of the mid-term bearish trend channel. Having said that, long gamma option market and a possible  cautious play before tomorrow’s NFP may limit the topside for the pair.

I think a risk of downside squeeze is more likely down to 1.3645-1.3660 break-out level to test the positioning sentiment but worth to go long on the back of daily oscillators. A sharp break of 1.3665 suggests a fall down to 1.3455 in a volatile price action as a risk.

So go long  EURUSD at 1.3665 with a tight SL at 1.3630 and target 1.3765 and 1.3890 on the topside.

The yen, commodities and most stocks rose during February.  The dollar and long-dated bond yields were mixed, while European currencies depreciated.

Copyright Larry Greenberg 2010.  All rights reserved.