The Canadian dollar was among the currencies that managed to show an excellent performance heading into this weekend’s trading despite being a bit gloomy at the market opening earlier in the week.
In addition to the encouraging Canadian inflation data report published last Wednesday, the Canadian dollar was also supported by rising crude oil prices in the market as oil was Canada's main export.
The crude oil market, on the other hand, continued to be affected by sentiment on the Russian-Ukrainian war, which affected supply. Supply disruptions pushed up oil prices, and supported the strengthening of the Loonie currency.
Against the US dollar, the Canadian dollar managed to strengthen while the king of the currency depreciated after the results of the FOMC meeting.
On the price chart of the USD/CAD pair, the price showed an increase at the beginning of the week to a high of around 1.28700.
However, the price decline was then seen to continue until the end of this week with the decline continuing around 250 pips.
As of today’s European session (Friday), the decline has hit back to the 1.26000 support zone tested in early March.
The price is seen to remain moving in a bearish trend after the price is below the Moving Average 50 (MA50) barrier level in the 1 hour time frame of the price movement on the USD/CAD chart.
Market analysts expect the price to reach as high as 1.25000 if the bearish pattern is maintained, seeing the Canadian dollar continue to strengthen against the US dollar.
On the other hand, if the 1.26000 support zone once again manages to support the upside again, the zone around 1.26800 will be the initial resistance to be tested before continuing higher.
The next rise is seen to be heading to the level around 1.27800 before the expectation to re -reach the 1.29000 high zone which was the price resistance last week.
