Commodity currencies showed excellent performance in trading this week with political uncertainty during the Georgia election, putting pressure on the US dollar.
While the Australian dollar and the New Zealand dollar were supported by current market sentiment, the Canadian dollar was seen as more sensitive to the crude oil market as crude oil was Canada's main export.
If you look at the price movement on the chart of the USD / CAD currency pair at the beginning of the week, the price is seen to re-enter the support zone from 1.26700.
The increase was due to the depreciation of the Canadian dollar influenced by previous crude oil market pressures with reports of talks between OPEC and its partner country partners failing to reach an agreement.
But the latest report clarifies the turmoil when Saudi Arabia offers a voluntary reduction in crude oil production of 1 million barrels a day in February and March.
It can be seen that USD / CAD trading yesterday plunged back to the support zone of 1.26700 after the previous price increase tested the SBR zone (support become resistance) 1.27800.
The price movement on the USD / CAD chart will also be affected by the development of the Georgia election with the expectation that the Democratic-backed decision will have a detrimental effect on the US dollar.
The continued price decline will lead to a lower concentration level around 1.26000, thus recording the latest low level since trading in April 2018.
However, if there is a re-increase above the price zone of 1.26700, the SBR zone (support become resistance) 1.27800 will be tested again.
Investors will also be wary of trading Canadian dollars ahead of the Canadian employment data report on Friday which will be published alongside the US NFP data report.
