Paul Rodriguez of ThinkTrading.com offers the outlook for Crude oil, USD/CAD, and the FTSE 100.
Bearish on Crude Oil:
Mir notes how the consensus expectation is strong for oil to see a base around $40 levels, which suggest a much lower number might be in sight. Rodriguez says that he remains bearish on oil prices, with the commodity space still trapped in the downward drift.
Rodriguez further explains that the financial markets might start backing off after the US rate hike begins. He speaks on the deflation scenario due to lower energy prices and the global economy, noting that the major equity indices are in for a ride as most major companies are commodity based.
USD/CAD – more upside ahead
On USD/CAD, Rodriguez sees upside potential on the charts, and sees the CAD/JPY cross as being interesting on long-term charts. He sees the CAD/JPY cross forming a right shoulder of a major top, noting that the cross hasn’t managed to recover to 2007 levels despite Yen weakness.
FTSE 100: Looking for a move towards 6200
The FTSE 100 is seen plotting higher lows on the long-term charts, but remains trapped in a range for now. The upside breakout failed, a topping pattern is seen and the footsie might make a move lower towards 6200, according to Rodriguez. He further sees the need to break the pattern of higher lows to trigger this downside move.