It came as a bit of a surprise for investors when the crude oil market recorded the biggest annual increase since 2009.
Oil prices reportedly fell 1% on Friday in the last day of 2021 but have recorded the biggest annual increase in 12 years, driven by assessments of the global economic recovery from the Covid-19 outbreak.
Due to those factors, the oil market -sensitive Canadian dollar has shown a strengthening since last Wednesday.
On the price chart of the USD/CAD pair, the price has started to show a bearish pattern after a few days of moving horizontally above the support zone of 1.27700.
Thursday’s trading yesterday gave a bearish signal when the price started moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame before continuing the decline in the New York session past the 1.27700 zone.
Continuing on Friday's trading, the price continued to decline in the Asian session recording its latest 2 -week low.
As of the beginning of the European session, the price has dropped to the level of around 1.27200 with the expectation that the bearish pattern will continue to lower levels.
The main support zone that is seen to be the focus is at 1.26000, but stronger momentum is needed for the price in the next session to reach that zone at the close of 2021 trading.
If the price returns to make a rise and passes the resistance level of MA50, investors will evaluate as a signal for a change in the bullish trend of the price.
The price increase will make the level around 1.29000 the focus and further on the 1.29600 high reached last week.
