Recent warnings by the Organization of Petroleum Exporting Countries (OPEC) have curbed the continued fall in crude oil prices in the market.
Previously, oil prices experienced a decline after the announcement of the release of supply of oil reserves including the United States (US) driven by the Russia-Ukraine conflict.
Yet OPEC had warned earlier in the week that it would be difficult to replace Russian oil affected by Western sanctions.
According to OPEC, oil supplies will be disrupted following sanctions on Russia and it will be difficult to balance adequate production.
The Canadian dollar received a positive impact with the strengthening displayed on Tuesday’s trading which was sensitive to current oil market sentiment.
On the USD/CAD price chart, the price which previously continued to rise above the resistance level of 1.26000 has touched the high level at 1.26600.
But the price eased back to the 1.26000 zone following the strengthening of the Canadian dollar in reaction to the resumption of oil prices yesterday.
Continuing trading until the end of the New York session and continuing in the Asian session this morning, the price hovered again above the 1.26000 zone.
The decline in prices is also likely to be limited due to the expected strengthening of the US dollar which will continue after the US inflation data was published to the latest highs again yesterday.
Investors are still waiting for clearer signals for further price declines as there are still indications for the price to move in a bullish trend supported by the Moving Average 50 (MA50) support level on the 1 -hour time frame on the USD/CAD chart.
If the rise is still successful, the zone around 1.26800 is seen to be the focus for price testing after the rise surpassed the highs reached yesterday.
Higher gains could target up to the 1.27800 level if the US dollar maintains its strengthening against the Canadian dollar.
Yet if the price continues to plunge lower below the 1.26000 zone, the zone around 1.25500 will be tested first before the next decline can reach the 1.25000 level.
