The Canadian dollar traded again strengthened over several sessions yesterday following support for expectations of rising crude oil prices, Canada's main export.
This is due to Saudi Arabia directing other OPEC member states to comply with their oil production quotas.
Saudi Arabia's Minister of Energy, Prince Abdulaziz bin Salman has warned countries that have cheated on previous production quotas that do not comply with the agreement.
As such, the countries involved have been instructed to reduce their oil production as a 'fine' for the offense.
With the reduction in supply, oil prices will rise while supporting the strengthening of the Canadian dollar again.
On the price chart for the USD / CAD currency pair, the price that made the rise yesterday test the resistance level of 1.32400 again making a reversal to pass the support level of Moving Average 50 (MA50) on the 1-hour price movement.
The price drop until the Asian session this morning is seen to reach the support level of 1.31400 in the RBS zone (resistance become support) and is seen to have difficulty penetrating it.
With the price expected to fall lower, the RBS zone will be broken before the lowest price can reach up to the support zone of 1.30000.
On the other hand, if the price jump comes back, it is likely that the US dollar will strengthen again, the price will test again the resistance level of 1.32400 which still failed to break since last week.
Investors will also focus on Canadian economic data at tonight’s New York session that could affect the Loonie movement.
