There was a shock on the global crude oil market at the beginning of yesterday's week, affecting the movement of the Canadian dollar.
The price of oil plunged initially, but bounced back inviting commodity investors to worry about the uncertainty.
This is due to reports circulating in the market that the petroleum exporting countries along with allies (OPEC+) are considering increasing production by 500,000 barrels per day.
However, the news was later denied by the Saudi Arabian Energy Minister who informed that the OPEC+ agreement will remain until the end of 2023.
Despite the rebound in prices after the initial fall, oil prices are still trading weak due to concerns about the Covid-19 in China, which is at high risk of affecting demand.
The resulting uncertainty has affected the price movement on the chart of the USD/CAD currency pair in the New York session yesterday.
If scrutinized, the price had previously started to display a rising pattern again last week after rebounding from the 1.32300 support zone.
In yesterday's trading, the price was seen to have made a jump almost touching 1.35000 before declining again to close the New York trading session around 1.34500.
The slow and slightly downward price movement continues into the Asian session this Tuesday morning, but the price seen is still above the support level of the Moving Average 50 (MA50) in the 1-hour time frame on the USD/CAD chart, indicating that the price movement is still in a bullish trend.
If the rise continues, the price will once again test the 1.35000 resistance zone before the high level reached on November 10 at 1.35700 will be challenged by the price.
However, a change in direction can also occur if there is a change in market sentiment during this week.
The price could retrace its decline and break through the important level of 1.34000 before signaling the start of a bearish trend when it breaks below the MA50 support level.
Some concentration zones will be tested for a lower drop such as the 1.33000 zone and also the 1.32000 support.
Canadian retail sales data will be the focus of investors in the New York session soon which could influence the movement of the Loonie in the market.
