• Oil production cut to be restored
  • Inverse Head and Shoulder pattern in USD/CAD (D1)
Chart 1: USD/CAD D1 chart

The OPEC+ meeting last week concluded with the decision to carry out partial restoration of oil production cut starting from May. Saudi Arabia will also be restoring its 1 million bpd voluntary cut over a period of three months starting in May. The decision resulted from the organization’s view that global demand in oil is recovering, pushing oil prices back to pre-pandemic levels. As a result of the decision to restore oil production cut, oil prices fell back to $60 per barrel, causing the Canadian dollar to weaken at the same time.

Currently, USD/CAD is trading at a three-year low of 1.26. Also, an Inverse Head and Shoulder pattern is currently in formation. With the OPEC’s decision to increase oil supply, the Canadian dollar may be facing some weaknesses for the time being. Look for buying opportunities of USD/CAD.

Inverse Head and Shoulder Pattern for USD/CAD (D1)
Buy Stop Order at 1.27800

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By Gim Hong Lee

Gim Hong has been a full-time currency trader for more than 2.5 years, focusing on day and swing trading of major currencies and their crosses. He is a frequent contributor of currency and economic analysis in Forex Trading Asia. Graduated from Columbia University in the City of New York with a bachelor’s degree in applied mathematics and statistics, the nerdy side of Gim Hong enjoys learning about data analysis, machine learning and their applications in currency trading.

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