The Canadian dollar is indeed sensitive to global crude oil market sentiment as crude oil is Canada’s main export.
Previously, the Canadian dollar received gloomy fuel demand outlook amid concerns of vaccine side effects that could hamper economic recovery in some European countries.
However, positive factors returned to support the Canadian dollar as reports of U.S. crude oil inventories as the largest consumer nation, suffered a decline.
Thus, the expectation of increased demand will restore crude oil market sentiment in the near future.
On the price chart for the USD/CAD pair, the Canadian dollar is seen to be still trading well against the US dollar which is under pressure from several current factors in the market.
Investors will also be wary of Canadian dollar trading in the New York session shortly ahead of the release of Canadian inflation data for February.
After a significant decline in the price on the USD/CAD chart last week, the price movement this week is seen to be more flat but tends to show a bearish pattern.
The price remained at its latest low with the level around 1.24300 having been hit by the price in the New York session yesterday.
With the price moving below the Moving Average 50 (MA50) barrier level in the 1 hour time frame of the price movement for the bearish trend signal, the price is expected to continue the decline towards the level of 1.24000.
On the other hand if the price jumps and passes the MA50 barrier, the resistance zones at 1.24800 and 1.25200 will be tested before investors see the trend change signal.
A higher rise will lead to the SBR zone (support become resistance) at 1.26000.
