Oil longs squeezed as WTI drops 2.5%, impacting commodity currencies

Crude oil prices experienced sharp declines with WTI falling 2.5% to $68.50, triggering a squeeze on long positions and weighing on commodity-linked currencies. The Canadian dollar weakened 0.4% against the US dollar, with USD/CAD rising to 1.4350, while AUD/USD dropped 0.3% to 0.6280. Technical indicators suggest oversold conditions in oil markets, but momentum remains bearish with next support at $67.00. The selloff accelerated after disappointing Chinese economic data raised concerns about global demand outlook. Gold remained relatively stable near $2,650, providing some support to risk sentiment. Oil's decline has increased pressure on CAD and AUD, both heavily correlated with energy prices. Near-term resistance for WTI sits at $70.50, while a break below $67 could accelerate declines toward $65. Traders are monitoring OPEC+ developments and US inventory data for potential catalysts.