Market optimistic sentiment strengthened commodity currency trading including the Canadian dollar which successfully overcame expected declines with concerns over the global crude oil market.
Expectations for the United States (US) economic stimulus package to be reached and implemented before the Presidential election have restored previous market risk situations, but investors remain cautious.
However, the increase in US crude oil inventories in the latest data will be a factor in preventing the rise in crude oil prices due to slowing demand.
The Canadian dollar, which is sensitive to oil market movements, performed brilliantly on Tuesday, moving stronger against the US dollar to push prices on the USD / CAD pair chart to its latest 6-week low.
On Tuesday's trading, the price testing the key level of 1.32000 has finally made a break below the Moving Average 50 (MA50) barrier level within the 1 hour time frame of the price movement for a bearish trend signal.
A price drop of around 100 pips was recorded to the level of 1.31000 before the price closed trading around the support zone.
Continuing trading today (Wednesday), the price has continued to decline and managed to pass the support level of 1.31000 to record the latest 5 week low.
Further decline is expected to lead to a lower support zone around 1.30000.
On the other hand, if the price jumps again, the SBR zone (support become resistance) 1.32000 will be the focus of the price again.
In addition to focusing on the development of the US economic stimulus package, investors will also be on the lookout for Canada's annual inflation data to be published at the New York session for a clearer signal of the Loonie movement.
