The market has witnessed a gloomy reaction to the release of the United States (US) NFP employment data report last Friday which made the US dollar significantly weaker.
Also published alongside is the employment data report which featured excellent readings for December and had a positive impact on the Canadian dollar.
Job gains in Canada soared to 104,000 as markets expected a modest increase of only around 5,500, beating the previous month's reading of 10,100.
Meanwhile, the unemployment rate in Canada has decreased to 5.0% from 5.1% previously, falling short of expectations to increase to 5.2%.
Therefore, the Canadian dollar has displayed a strong movement alongside the US dollar which continued to move weakly until trading resumed earlier this week.
The price chart of the USD/CAD currency pair if observed last Friday has shown a decline from the high level of 1.36600 until passing the price support zone at 1.35000.
Although the momentum slackened a bit at the beginning of the week yesterday, the price decline continued until it reached around 1.33600.
Then the price is flat between that level and the resistance is at 1.34000 until it connects to the Asian and European sessions today (Tuesday).
Price movements that are still below the Moving Average 50 (MA50) barrier in the 1-hour time frame on the USD/CAD chart will give an expectation that the bearish trend will continue in price.
A further decline is seen to go to around 1.33000 first before reaching the target support zone which is lower at 1.32000.
However, if the price surge occurs beyond the 1.34000 level and also breaks through the MA50 barrier, investors will be on the lookout for early indications of a trend change again.
The increase if continued will test the 1.35000 level which will be the latest SBR (support become resistance) zone for the price before retargeting to 1.36600 before.
