July 8, 2021

Oil Market Sentiment Also Supports USD/CAD Rise

 The price movement on the chart of the USD/CAD currency pair continued to rise higher today after seeing a significant spike in prices last Tuesday.

During the surge, the US dollar has shown a rebound after a weak move earlier in the week as investors await the minutes of the FOMC meeting to be published.

However, pushing up prices was also the sentiment of the global crude oil market which put pressure on the Canadian dollar as crude oil is Canada's main export.

Disputes between major oil-producing countries involving Saudi Arabia and the United Arab Emirates (UAE) are seen to affect the sentiment of the commodity market.

Failure to reach an agreement on production cuts is likely to push producing countries to increase oil production without following the stipulations of previous agreements.

On the USD/CAD chart, the price has rebounded above the Moving Average 50 (MA50) support level to signal an uptrend this week.

The rise until yesterday has entered the resistance zone around 1.25000 after the price fell below that level last April.

With the pattern displayed, investors still see the price will continue to rise higher towards the resistance level of 1.26000 before reaching the level of 1.26300.

On the other hand, if the decline occurs again, the level of 1.24700 as well as the MA50 support will be tested before the price signals the beginning of the bearish trend again.

The lower decline is seen to lead to previous focus levels such as the 1.24000 level and the 1.23000 support level.

Investors will also focus on the Canadian employment data report to be published on Friday to assess the movement of the Canadian dollar.