DXY, Oil, USD/CAD & USD/NOK Forecast – Dollar and Oil Opportunities Present Themselves

The US dollar and oil markets are likely to offer opportunities as we approach a major inflection point. Traders are watching the dollar index, crude oil and related currency pairs closely for signs of weakening momentum and potential reversals

US Dollar Index (DXY)

The US Dollar Index, DXY, is a chart I watch all the time. We’ve had a couple of good days and it seems like momentum is slowing. The question now is whether the dollar is about to lose traction. If we fall below 97, we may start to unravel; there is support down to 95, so a break won’t be easy. I’m waiting to see if it rolls over; that would be a great signal to start shorting the dollar against almost everything.

Source: TradingView

Light Sweet Crude Oil (CL)

The Light Sweet Crude Oil market, WTI crude oil, had fallen during the early part of the session but is holding near the \$62 region around the 200‑day EMA. A bounce here could lead to the next couple of charts. If the dollar weakens and oil shows strength, going long oil makes sense, and a rally could push prices as high as \$66.

Source: TradingView

USD/CAD

The USD/CAD pair, USD/CAD, is testing resistance near the 1.37 level. If we break above 1.3733 then a correction toward 1.39 could follow. A stronger dollar and stagnant oil prices would support that move. However, if oil rallies and the US dollar weakens, the pair is likely to drop, perhaps back down toward 1.35. Keep in mind the influence of oil on USD/CAD is weaker than it used to be, but it still matters.

Source: TradingView

USD/NOK

The USD/NOK pair, USD/NOK, is more of a pure play on oil. Norway’s currency moves mainly on oil. If oil starts to rally, the 9.75 level should hold and the market could fall toward 9.3. The chart shows an ugly rounding top that supports this view. Watch oil: if it rallies, Norway will likely be a big winner and the krone and Norwegian stock index could rally as well.

Source: TradingView