Crude oil prices continued to decline on Thursday, continuing previously posted losses following a surge in U.S. crude oil inventories as reported by the Energy Information Administration (EIA).
The increase in inventories came after U.S. production rates returned to levels before Hurricane Ida hit a few months ago. Output rose to 11.1 million barrels a day last week.
The fall in oil prices also pushed the Canadian dollar to depreciation as crude oil was Canada's main export.
On the price chart of the USD/CAD pair, the price has returned to show gains for the second day yesterday after a change from the previous bearish trend.
After the decline displayed since last week continued earlier this week slipped to the support zone of 1.26000, the price has shown a rebound last Tuesday.
Giving an early signal for a bullish trend change, the price has moved past the Moving Average 50 (MA50) barrier on the 1 -hour time frame and tested the initial resistance at 1.27000.
The rise continued yesterday to the high of 1.277000 but failed to pass the resistance zone before showing a decline in trading today (Thursday) from the beginning of the Asian session to the European session.
With the bullish pattern displayed, it is likely that the 1.27000 zone as well as the MA50 will re-support the upside and retest the 1.27700-1.28000 resistance zone.
And if the bullish trend of the price continues, the price will continue to rise higher breaking the resistance zone and can reach up to the high level of 1.29500.
On the other hand, if the price returns to decline, the 1.26000 support zone will be tested again for investors to get further price movement indicators.
A lower decline below the support zone is seen to test previous focus levels such as 1.25500 and then 1.25000.
