Regarding LCrude, the Federal Funds Rate and CAD

Earlier today the positive data about the Crude Oil inventories caused a sharp drop in the LCrude charts. That in turn affected the “oil” currency pair USD/CAD, which, after a purely technical drop of 90 pips in the past few days, jumped sharply to the upside and climbed with 70 pips for less than 30 minutes.

Later today we expect the announcement of the Federal Funds rate and analysts believe that rate will remain unchanged. 

From a technical analysis point of view the situation on the smaller time frames is unclear – it’s difficult to say whether the pair will start dropping right away today or will it reach its natural resistance level at 1.3300 first, which can be seen on the weekly time frame. 

I, personally, expect that the pair will reach the resistance level towards which it has climbed in the past 11 days first. I can’t say, however, when that will happen. The last bullish candlestick on the four-hour time frame, which was affected by fundamentals, engulfed the five previous candlesticks, and it is normal to see retracement to the downside afterwards. 

Considering that the resistance at 1.3250 is quite strong as well a further move to the upside seems even less likely.

 On the other hand LCrude appears to be in a freefall state.

In other words, today the fundamental news make the technical analysis picture quite unclear. All trading should be done very carefully.