WTI and CAD Prices Tied Together in Closely Correlated Market Action

The recent price action in WTI and USD/CAD has been closely correlated, as expected. Oil's bounce off the 200-week Moving Average two weeks ago led to a decent recovery from lower levels, despite closing below the 200-day M/A for two consecutive days.

However, analyzing Oil without considering the Canadian Dollar is only looking at half the picture, according to recent market behavior. As Oil rises, the CAD tends to strengthen, causing USD/CAD to fall.

Two key levels on USD/CAD are worth watching this week: the 200-day M/A at 1.3852 and the 200-week M/A at 1.3734.

WTI has formed a small bullish flag on its Daily chart, indicating a technical target around 95.50.