Oil, Natural Gas, USD/CAD Technical Analysis: Key Levels and Seasonal Consolidation

USD/CAD is influenced by Canadian GDP growth, U.S. economic data, and oil market developments. Canadian GDP rose by 0.3% in October, exceeding expectations and highlighting economic resilience. However, mixed inflation data adds uncertainty, with a drop in the Raw Material Price Index and a moderate rise in Industrial Product Prices. The USD/CAD is supported by a strong U.S. dollar, which surged after the Fed’s rate cuts but was corrected lower following the PCE inflation data. Thin liquidity during the holiday week may lead to heightened market volatility.

Oil prices remain in a consolidation phase and wait for the next direction. Brent crude oil (BCO) fluctuates around $72.50, while WTI crude oil (CL) consolidates near $69.50. Friday’s upcoming crude oil inventory data could provide further clarity for the oil market. However, the holiday season may keep prices within the current consolidation range.

Meanwhile, natural gas (NG) has broken through key levels, initiating bullish momentum driven by increased heating demand. This trend reflects seasonal factors and higher consumption, supporting the recent price rally.

WTI Crude Oil (CL) Technical Analysis

Oil Daily Chart – Consolidation at Neutral Zone

The daily chart for WTI crude oil shows that the market has remained in a neutral zone between $67 and $72.20 over the past two months. A breakout from this range will determine the next direction for WTI crude oil. The price is currently within the apex of a triangle, indicating price compression. The RSI is also neutral, reflecting the lack of momentum in the market due to the holiday season.

Oil 4-Hour Chart – Consolidation within Descending Channel

The 4-hour chart for WTI crude oil shows that the market is trading within a descending channel. The formation of this channel at the apex of the triangle indicates a neutral stance in the oil market. However, a breakout above $72.50 is needed to signal higher prices.

Natural Gas (NG) Technical Analysis

Natural Gas Daily Chart – Bullish Momentum

The daily chart for natural gas prices shows that the market has formed a cup-and-handle pattern. The price broke the neckline of this pattern at $3, leading to positive consolidation between $3 and $3.60. Following this development, the market broke above $3.60, signalling further bullish momentum. This breakout has opened the door for higher prices in natural gas. The natural gas market maintains its bullish outlook as the price remains above the 50-day and 200-day SMAs.

Natural Gas 4-Hour Chart –Positive Development

The 4-hour chart for natural gas prices shows the formation of an ascending channel, with the price hitting resistance around $3.80. However, a rounding cup pattern has formed within this ascending channel. The price broke the neckline of this rounding cup in the $3.50 to $3.60 zone, indicating positive price development.

USD/CAD Technical Analysis

USD/CAD Daily – Bullish Trend

The daily chart for USD/CAD shows a breakout from the ascending channel pattern. The breakout above $1.4250 has pushed USD/CAD to higher levels, but overbought conditions are evident based on the RSI. These overbought conditions suggest a potential correction in USD/CAD. The $1.4250 and $1.4030 levels serve as key support zones for this correction. On the other hand, a break above $1.4460 will continue the bullish momentum.

USD/CAD 4-Hour Chart – Positive Development within Ascending Channel

The 4-hour chart for USD/CAD shows the formation of an ascending channel, indicating bullish momentum in the pair. The emergence of multiple bullish patterns within this channel reinforces the strong upward trend. Moreover, the pair recently formed a descending channel at the top, highlighting price consolidation. However, a breakout above $1.4460 will likely initiate the next move higher.