The Canadian dollar moved stronger following the Canadian central bank's monetary policy meeting in the New York session yesterday which saw interest rate results continue to be maintained at 0.25% as expected.
The Bank of Canada (BOC) is projecting good economic growth for the first quarter of this year, more positive than previous expectations for the Canadian economy to experience a downturn.
This factor has also been the driving force behind the strengthening of the Canadian dollar which has previously been supported by rising crude oil prices following news of drone strikes on Saudi Arabian oil ports.
The crude oil market is likely to fail to add an injection for the Canadian dollar as the U.S. oil inventory report hits high.
But the market reaction to the outcome of the BOC meeting saw the Canadian dollar weaken slightly before strengthening again after that.
Against the depreciating US dollar, the Canadian dollar took advantage of the situation to strengthen with the market seeing a decline in prices on the USD/CAD currency pair chart.
Examining the price movement in Wednesday's trading yesterday, the price initially made a rise in the Asian session until it reached the high level of 1.36800. However, it showed a decline again in the European and New York sessions.
After moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame for the bearish trend signal, the price dropped to the level around 1.26100.
Continuing trading today still sees the price showing signs of continuing the decline but is supported at the 1.26000 level.
The RBS (support become resistance) zone will be tested before the price that manages to pass it will continue to decline lower to head back to the 1.24700 support zone which was reached in February.
If the price makes a rise, investors will refocus on the 1.26800 resistance zone after passing the MA50 barrier.
A higher rise is expected up to the level around 1.27800 which is the price focus zone in February trading.
