Greenback striking back since last Friday NFP seems to be forming a key reversal for Oil.

The daily close ( 73.93)  below mid-term bullish trend channel  at 75.15 and 55 days SMAVG at 75.60 suggests a key reversal and a break of 73.81 will trigger further SL  and break-out models related sell interest down to 70.65-71.10 area before the real target at 65.00 in a possible bearish reversal.

As a spot monkey, I cannot short the oil, I am looking for the most correlated pair/train to get in to catch the same direction.

CADNOK has a -0.745 negative correlation and in any USD pullback or risk sell off scenario, this number  seems to be decreasing significantly as it happened in the Q4, 2008.

The pair broke a good resistance yesterday at 5.4085,  rallied up to 5.4435 and closed at 5.4380 after some supply arrived just before the 5.4485 resistance ( 38.2% fibonacci level of 5.7940 to 5.2347).

I expect a retrace down to 5.4105 in today’s session and and may be lows getting printed at 5.4050-5.4085 area to get rid of short term momentum guys.

Overall, as Oil shows the direction, I am keen to go long CADNOK at 5.4300 and add more at 5.4100 with a SL at 5.3750, targeting 55 days SMAVG at 5.5250 and 5.5804(61.8% fibonacci retrace of 5.7940 to 5.2347)