Although the performance of the US dollar is still declining this week, why is the price on the chart of the USD/CAD currency pair showing an increase?
The pattern of price increases described was driven more by the depreciation of the Canadian dollar which was influenced by global crude oil market sentiment.
Concerns about the transmission of the Delta variant of Covid-19 in the United States (US) and China, which are the two largest oil user countries in the world, are seen to affect the level of fuel demand.
However, tensions in the Middle East are now being monitored after reports of the seizure of an oil tanker outside the waters of the United Arab Emirates (UAE).
The fall in oil prices has pushed up the prevailing prices on the USD/CAD chart with the high level reached overnight around 1.25700 before returning back to the 1.25300 price zone so that it continues in today's trading (Wednesday).
The price movement which also moves above the support level of the 50 Moving Average (MA50) on the 1-hour time frame creates a positive risk that the price will continue to move in a bullish trend.
Continued gains are seen as heading towards the 1.26000 level to test the resistance level after the price failed to break it in last week's test.
If the bulls manage to break the barrier, the next target is seen at the 1.28000 high level after the price hit the barrier zone last month to record a 5-month high.
However, if the price makes a decline below the MA50 support level and gives a bearish price signal, the 1.24300 support zone will be tested once again before the decline lower will break the 1.24000 support level.
For Canadian dollar trade, investors will also look forward to Friday's Canadian jobs report to be published alongside the US NFP jobs report.
