The news about China's plan to implement economic stimulus measures is currently one of the hot topics in the financial market.
People's Bank of China (PBOC) Governor Pan Gongsheng announced plans to lower lending rates and inject more funds into the economy in addition to planning to cut 50 basis points for reserve requirement ratios.
Among the significant effects that can be seen is the trading of the Canadian dollar, which showed a jump in value to the highest level compared to the US dollar since March 2024.
The move, which is expected to have an impact on China's economic recovery, also boosts confidence in global crude oil demand.
With China being the world's largest oil consumer, increased demand for oil will also benefit the Canadian dollar, as crude oil is the country's main export.
It can be observed that the price movement on the chart of the USD/CAD currency pair is increasingly plunging downwards, continuing the bearish trend movement pattern.
At the beginning of the week, the price has started to show a further decline also driven by the depreciation of the US dollar, but the price bounced at the support of 1.35000.
On Tuesday, the price resumed its decline and then broke through 1.35000 and reached around 1.34300 at the close of trading in the New York session.
Prices slowly resumed trading in the Asian session this morning (Wednesday) with the expectation that the downward trend will continue.
The closest target is the 1.34000 zone, but with the momentum of the movement before it is not impossible that the price can extend the decline to a lower level.
The next level focus is seen at around 1.33000 for the price to record the latest 8-month low.
However, if the price starts to reverse its direction to make an increase again, the focus will return to the 1.35000 zone that was broken during yesterday's decline.
For a higher increase after there is a trend change signal, the target will move to the 1.36000 level.
See the picture of the price chart of the USD/CAD pair below for your technical analysis reference.
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