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The US dollar continues to fall against the Canadian dollar after coming under pressure due to some action by Saudi Arabia in terms of oil output this morning.
In terms of news, The Kingdom of Saudi suddenly announced that it was to extend the voluntary cut of 1 million barrels per day for another month to include August.
Oil prices also jumped on the back of Saudi Arabia, causing the Canadian dollar to rise as this is a currency that is heavily linked to the price of oil usually.
More notable, a sustainable bid above moving above the $70.00 per barrel benchmark level had occurred with Saudi Arabian official saying that were to extends voluntary output cuts for another month.
It is worth considering that the Kingdom of Saudi Arabia are the largest oil producer in the world and a key member of OPEC. Any news from Saudi on output moves oil price.
Going forward, if this divergence between USA and Canadian central banks remains, we are likely to see more USDCAD downside, as the BoC are hawkish on rates.
Very high levels of bearish sentiment are still being seen towards the USDCAD pair, with some 75 percent of traders currently holding a negative view towards the USDCAD pair.
With the strong bearish sentiment bias probably hints that more upsides could happen as retail are typically on the wrong side of the trade.
USDCAD Short-Term Technical Analysis
The USDCAD pair has moved above the Ichimoku Cloud on the four-hour, however, the move is no means confirmed in terms of a breakout to the upside.
It is only when we see the Lagging Line (Green Line) crossing above the cloud then do we see heightened chances of higher prices.
USDCAD Medium-Term Technical Analysis
The USDCAD pair has recently found strong technical support after falling below a huge head and shoulders type price pattern, with the neckline around 1.3330.
It should be noted that the price is still below the neckline and the target of the bearish pattern is 1.2800, which could mark a whopping 500 decline.
