WTI crude oil fell sharply after Friday’s NFP, more than 5% off its levels above 100.50 down to 95.60 to start the 5/7-5/11 trading week. So far, through the 5/8 and 5/9 sessions, the market has been trying to hold prices above this 95.60 support pivot, which was seen as support back on February 2, 2012 (seen in the daily chart). The price action in the 4H chart shows a possible double bottom forming, confirmed if the market can push above 98.25. The RSI dipping way below 30 was a bearish sign, but in the very short-term it can be a sign of oversold condition. The fact price is trading at the lower Bollinger Band (here 3 standard deviations from the 200SMA) also suggests oversold condition relative to the recent consolidation from April 9 to May 2 before it started to drop precipitously. The daily chart shows that price action is also at the 200-day SMA. The RSI broke below 40 showing loss of bullish momentum and is kissing 30, reflecting introduction of bearish momentum. With the consideration that a bearish trend could be developing, a bullish outlook from the 4H double bottom should be limited. Perhaps the previous support at 100.50 will become an area of renewed selling. The 100.00 psychological barrier might also provide resistance. From the 100-100.50 resistance area, the first bearish outlook can be the 95.60 pivot, in case the market starts to consolidate sideways instead of continuing the trend. But further downside can be seen especially if risk aversion persists. The next support pivot is 92.45. A weaker WTI crude price could be a confirmation for a weaker Canadian dollar since the two are correlated. As WTI fell from 106.25 down to 95.60, USD/CAD rallied from 98.25 up to the 1.00 parity level. 1.0050 is key resistance for USD/CAD, and if WTI does continue lower than 95.60, USD/CAD should also be breaking above that key barrier.

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