Once again USO is running in front of one of the only true FX arbitrages based on the real fundamental value of the dollar as crude trades the world over in $USD. Today it is running quite far ahead of the Euro and in the past, the Euro has been the leading indicator for the direction of crude, suggesting USO should see downside from here.
On an intraday basis the same thing happened earlier around 11:30 as USO ran in front of the Euro, the Euro failed to make a similar new high and now USO has turned down from that high, it''s the same situation on a macro and micro basis. The macro outcome should be the same (see above).
The 1 min 3C chart is leading sharply negative, especially since the 11:30 high was hit and crude diverged with the $USD.
The 1 min chart has leaked, as it should, to the next timeframe, the 2 min and it is showing the same characteristics.
The 2 min is leaking to the 5 min now and it has started leading negative.
On the 15 min chart, the range/top (likely) in crude/USO is seeing a continued negative divergence lower.
Nothing has changed on the 30/60 min charts which are very negative.
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