Earlier in the week, the loonie dollar continued to gain support from optimistic investors ’expectations of the Bank of Canada (BOC) to offer a hawkish statement at its latest meeting.
Even so, the BOC meeting seemed a bit disappointing after the central bank had already kept interest rates unchanged amid the uncertainty experienced by the Omicron variant.
The loonie dollar is also under pressure from the fall in oil prices at this point which indirectly continues to give the USD a chance to strengthen again.
After reaching a 12 -week high of around 1.28500, the price movement on the USD/CAD chart is seen to start a plunge of almost 250 pips in this week's trading.
But the plunge seems to be limited to the support zone of 1.26000 for the price to climb back in the weekend trade to retest the SBR (support become resistance) zone of 1.27000.
However, the price movement seems to be starting to give an early hint of a bullish trend change in line with the price re -trading above the Moving Average 50 (MA50) barrier level.
Of course the next SBR zone at 1.28000 is likely to be the key zone to be reached again for the return price to continue to maintain an even more intense climb.
A higher climb will support the price movement on the USD/CAD chart to once again test the resistance zone since January 2021 around 1.28500.
But it is not impossible that the SBR zone could also deter further price increases, with the 1.26000 support zone likely to be considered the next target.
If the price drop occurs, it will drive the price movement to create the latest low in 3 weeks which is expected to reach the 1.25000 zone.
