The price that was pushed down since last Tuesday bounced back up again on the chart of the USD/CAD currency pair yesterday.
Analysts see the situation as being driven by the decline in the global crude oil market where both WTI and Brent benchmarks fell to lower levels yesterday.
The Canadian dollar currency was weak due to the drop in crude oil prices as the commodity became Canada's main export.
If you look at the USD/CAD chart, the price has plunged last Tuesday from the 1.38400 level until it reached around 1.36600 on Wednesday.
The plunge has been caused by a significant depreciation of the US dollar when the reaction of the United States (US) inflation data was published lower than forecast.
However, due to the Canadian dollar's dismal performance on Thursday yesterday, the price rose again to reach 1.37750.
The price increase seen above the 1.37000 level and also the Moving Average 50 (MA50) barrier on the 1-hour time frame on the USD/CAD chart signals a change to a bullish trend.
The move higher is likely to continue towards the 1.38000 level, then retest the previous 1.38400 resistance zone.
Next, the resistance zone at 1.38800 will be the target to reach after the price hovered at that height in early November.
Meanwhile, for the expectation of a possible decline, the price will return to the 1.37000 level.
A lower drop will expect the support zone around 1.36500 to be tested and the price reaction in that area will be observed for investors to get an indication of the direction of further movement.
