The Canadian dollar was seen starting to get an injection of strengthening value earlier in the week as it was weighed down by crude oil market sentiment.
Oil prices recorded an increase driven by supply pressure factors with several issues of concern.
Among them is against the Organization of the Petroleum Exporting Countries (OPEC) which is struggling to control supply in the market.
Libya as one of the members of OPEC is facing the issue of political unrest with their oil production reportedly declining by more than 800,000 barrels a day.
In addition to OPEC's focus, investors are also monitoring the progress of reports of strikes in Norway by oil and gas workers.
The following factors are seen to continue to drive up oil prices, while supporting the strengthening of the Canadian dollar as crude oil is Canada's main export.
However, investors are also wary of the movement of the Loonie currency while awaiting the Canadian jobs data report to be published over the weekend along with the US NFP data report.
If we look at the price movement on the chart of the USD/CAD currency pair, the bullish pattern displayed until the end of last week failed to be maintained when the rising factor of oil prices again changed the direction of the price.
Starting trading earlier in the week yesterday, the bulls in the Asian session tested the resistance level at 1.29000 before making a rebound.
A bearish signal at the beginning of the week with the price moving below the Moving Average 50 (MA50) barrier level on the 1 -hour time frame indicates that last week’s bullish pattern has been ‘broken’.
Trading in the New York session yesterday also saw the price still hampered at the MA50 level after a bullish attempt at the beginning of the session.
Analysts expect a lower price decline to take place as the US dollar remains weak since yesterday for the price to test the support level hit last week around 1.28200.
The continued lower for the bearish trend movement of the price is seen to hit the 1.27400 zone before investors assess the price reaction for further price indication.
Yet if the price returns to show a rebound, the price that passes the MA50 barrier is then expected to test the resistance at 1.29000.
The higher rise will head back to the previous focus level at the 1.3000 high.
