Charts of the Week: Can USOIL extend its rally despite the challenges?

USOIL ran into strong resistance at the 61.8 % Fibo of the Oct-Jan decline, and is struggling to maintain upside momentum. Concerns about an escalation of the trade war and a slowdown in China are weighing on the Oil price. Furthermore, there is the risk that OPEC might announce an increase in output at its upcoming meeting in June. From a technical perspective, the uptrend in USOIL remains intact and price managed to hold above the 200 DMA on multiple tests. However, failure to clear the $63 resistance level in the near-term might lead to some position covering from Oil bulls and add to the pressure.

USOIL
USOIL

A decline in the Oil price could be negative for the Canadian Dollar, and could potentially boost USD/CAD. The currency pair bounced off a key trendline recently and is slowly approaching $1.3425 resistance. USD/CAD remains in a fairly tight range, and it would most likely require a clear break above $1.35 for the currency pair to gain momentum.

USDCAD
USDCAD

Meanwhile, the commodity currencies continue to struggle. The Kiwi Dollar reached a new 7-month low and there are no signs that the downtrend might pause anytime soon. The RSI signals slightly oversold conditions on the Daily, but not far from extreme. The next big level to watch is support at 0.6425 - the October 2018 low.

NZDUSD
NZDUSD

The political uncertainty in the UK has been keeping the British Pound under pressure. EURGBP is currently testing the 200 DMA. A clear break above the line would be a bullish signal, and the next bull target would then be 0.90.

EURGBP
EURGBP

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