Following the significant strengthening by the US dollar continued in earlier trading this week, the price movement on the chart of the USD/CAD currency pair also showed an energetic spike after signals of a change in the price direction last week.
Heading up to the FOMC meeting, the price was seen continuing gains at the market opening earlier in the week yesterday with a daily rise of around 120 pips recorded having reached a high of 1.29000 recording the latest 4 -week high.
The level is also assessed as a resistance zone for the previous price and will certainly feature an attractive price reaction that will be an indication for investors for further price movements.
Meanwhile, the Canadian dollar is expected to have a negative impact on the expected decline in crude oil demand, as crude oil is the main export commodity in the country.
This was driven by reports on the re-infection of Covid-19 in China which called for the re-implementation of movement restrictions, a factor in reducing demand by China as one of the world's largest oil consumers.
With the current factors in the current market, the price on the USD/CAD chart is assessed to have a tendency to continue rising even higher today.
Rising above the resistance at the zone of 1.29000, the price is expected to continue the series of climbs up to the concentration level at the height of 1.3000.
If the price continues to rise and surpass the high of 1.30760 reached last May, the price will record the latest 2 -year high with a target to break the level of 1.31000.
On the other hand, if the price starts to show a decline again, the support zone for the price is seen to be around 1.27500.
The continued lower decline will be an early signal of a change in the bearish trend again for the price to return to the RBS zone (resistance become support) at 1.26000.
