September 28, 2021

Crude Oil Market Continues To Drive USD/CAD Lower

 Crude oil prices reportedly continued to show an increase for the 6th day in a row due to limited supply expectations while demand rates were seen to be rising.

Investors assess that the easing of pandemic sanctions in major economies will revive demand for crude oil.

Even WTI and Brent crude oil recorded price spikes respectively to the level since last July and the highest since October 2018.

Positive sentiment in the global crude oil market has supported the strengthening of the Canadian dollar as crude oil is Canada's main export.

If examined on the price chart of the USD/CAD currency pair as well, the price has shown a bearish pattern since last week signaling a better Loonie movement against the US dollar.

Since last Thursday, the price has shown a decline from the high of 1.28000 to the level of 1.26000 as of today (Tuesday) with 200 pips of decline recorded.

However, at the beginning of the European session today, the price rose again after reaching the support level of 1.26000.

The rise, however, has not yet signaled a change in trend and has been hampered by the Moving Average 50 (MA50) resistance level on the 1 -hour time frame.

If the bearish trend of the price continues, the lower price decline below the 1.26000 zone will record the latest 3 -week low possibly to the focus level around 1.25400 and the 1.25000 support zone.

On the other hand if the price manages to make a jump for the initial signal of a bullish trend change, the price will test the nearest resistance at the 1.27000 zone before returning to last Thursday’s price plunge level at 1.28000.