The CAD had to maintain a balance between bullish and bearish sentiments for a long time. However, the bears are on the lead by the end of this week, which led to attacking the indicated currency and limiting its attempts to grow.
Based on the observations of analysts, today's "bearish" dynamics in the USD/CAD pair remains relevant. This morning, the pair started at the level of 1.3181, which was followed by a decline. Subsequently, it traded in the range of 1.3174-1.3175, leaving behind the pivot point of 1.3250. This is due to the rise in oil prices, which determines the CAD dynamics.
According to them, this currency pair is still far from breaking through the psychologically important level: low of 1.3000, but we should not lose hope. If Brent quotes grow, it will quickly enter a downturn and continue the movement.
On another note, the Canadian dollar is under pressure due to the recovery in commodity prices. The growing prices for black gold supports the buyers of this currency. The price of the benchmark Brent grade is rising today, despite the growth of US shale oil reserves. According to the US Energy Information Administration, oil reserves in the country increased by 501 thousand barrels, up to 492.9 ml barrels per day. Now, the total inventory is 12% above the five-year average. Experts sum up that this activates the growth of oil prices and the fall of the CAD.
Moreover, the current unstable state of the USD is another significant factor for the CAD. On Wednesday, the US currency slipped against the Canadian currency by 0.4%, that is, to 1.3252, which negatively affected the CAD. This trend gained momentum after Donald Trump called for an additional fiscal stimulus package to support small businesses affected by the COVID-19 pandemic. Currently, the White House and the US Congress are discussing the formation of a fourth stimulus package. If this document is adopted, payments of unemployment benefits, financial assistance to health care institutions, assistance to small and medium-sized businesses, etc. are expected. At the same time, Americans will be able to receive lump sum payments of $ 1.2 thousand per person.
Experts believe that the "loonie" will remain in a bearish trend in the short term, but the situation may change at any time. In the long-term, it is expected to experience a series of ups and downs, which is strongly influenced by the USD dynamics and the price of black gold. In view of these factors, it is difficult for the CAD to prove itself, but experts note the potential for its gradual rise.
