Why do market analysts expect that the price on the USD/CAD currency pair chart will rise again?
There are 2 factors that are seen to affect the situation.
First, expectations for a resumption of the US dollar after the initial signal in the New York session yesterday, it is likely that the focus of investors has begun to turn back to the monetary policy tightening measures by the Federal Reserve (Fed).
Second, the risk to the depreciation of the Canadian dollar is influenced by the crude oil market because the commodity is Canada’s main export.
Based on the latest report, the decline in oil prices in the market as the actions of US President Joe Biden who wants to lower the cost of fuel is seen to have started to get the attention of investors.
Thus, the price movement on the chart of the USD/CAD currency pair in the Asian session this morning again displayed a rebound showing the Canadian dollar moving weaker against the US dollar.
Previously, the price was seen showing a decline since the early trading of the week opened heading up to the price support zone around 1.29000 after the price increase at the end of last week had reached a high of around 1.30800.
It is likely that the bullish trend of the previous week's trading price will resume after the rally is seen to return past the Moving Average 50 (MA50) barrier on the 1 -hour time frame on the USD/CAD chart.
If the rally continues above the 1.30000 level, the price has the potential to overcome last week’s high to test the 1.31000 resistance zone.
Passing the rise above the 1.31000 level will record the latest 2 -year high after also surpassing the high reached last month.
However, beware if the price continues to plunge lower towards the end of this week with the support level of 1.29000 will be the focus of testing again.
A lower decline below the 1.29000 zone will give an indication for a bearish movement of the price with the price fall target could reach up to around 1.27300 or lower at the 1.26000 zone.
