Why did the Canadian dollar remain weak even though the Canadian inflation data published at yesterday’s New York session was positive?
Canadian monthly inflation data published for July rose to 0.6% against expectations to remain at 0.3%.
However, the Canadian dollar remained bearish in the market towards the weekend trade due to declining global crude oil market sentiment.
Growing concerns over fuel demand are expected to be affected following the implementation of economic sanctions measures for the largest oil-consuming countries facing the latest Covid-19 wave.
If we look at the price movement on the chart of the USD/CAD currency pair, the price continued to surge higher in the Asian session this morning after passing the resistance level of 1.26000 on Tuesday.
The rise has also hit the latest high for a 4 -week trading period with the rise expected to continue while driven by the strengthening US dollar.
After Tuesday’s surge past 1.26000, the price eased slightly in Wednesday’s trading yesterday to retest that level as well as the Moving Average 50 (MA50) support level on the 1 -hour time frame.
Next the price resumed a continuous rise in today’s trading. The price increase is expected to head to the resistance zone 1.28000 after the level was reached on July 19.
On the other hand, if the price plummets again, the RBS (resistance become support) zone of 1.26000 will return to the focus of the price.
If the zone fails to support the rebound, the lower decline is likely to re -hit around the 1.25000 support zone.
