The USD/CAD currency pair attracts the attention of investors with several factors affecting the price up and down in a short period of time.
Let's examine the following factors.
First, the decline on the USD/CAD chart was driven by the depreciation of the US dollar after a dovish -toned statement by Federal Reserve (Fed) Chairman Jerome Powell for indications to maintain a loose policy despite the inflation rate recording an increase.
Later, the Canadian dollar strengthened in the New York session after the decision of the Canadian central bank (BOC) policy meeting remained supportive of the Loonie dollar movement.
The BOC kept interest rates unchanged and continued to reduce weekly asset purchases (tapering) from 3 billion to 2 billion.
However, continuing to trade today (Thursday), prices are seen rebounding again believed to be driven by the re -depreciation of the Canadian dollar which was affected by the instability of the crude oil market.
Major oil-producing countries are reportedly set to increase oil production levels, making investors worried that the oversupply situation in the market could affect crude oil prices.
After the decline on the USD/CAD chart yesterday hit the level around 1.24250, the price rebounded again around 120 pips past the level of 1.25000.
Moving above the Moving Average 50 (MA50) support level on the 1 -hour time frame of price movement for a bullish signal, the price has risen to the level of 1.25500 in the Asian session before declining to the level of 1.25200 at the beginning of the European session.
The continued rise will test the resistance zone at 1.26000 which was also tested last week but failed to be broken.
Meanwhile, if the price returns to make a decline below the level of 1.25000, between the focus levels that will be tested are at 1.24400 and the level of 1.24000.
