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  • USD/CAD extends Thursday’s drop as Saudi plans to raise oil prices. 
  • The daily chart shows scope for a deeper decline to 1.3845.

The USD/CAD is feeling the pull of gravity during Friday’s Asian session, having declined by 1.22% on Thursday to register its biggest single-day decline since March 25. 

The pair is currently trading at 1.3934, representing a 0.27% decline on the day. 

Thursday’s big bearish engulfing candle indicates the bounce from the April 30 low of 1.3850 has ended at 1.4173 and now the path of least resistance is to the downside. 

The immediate support is located at 1.3845 – the trendline connecting April 13 and April 30 lows. A close below that would imply a resumption of the retreat from the March 19 high of 1.4667 and shift the focus to the 100-day average, currently at 1.3585. 

On the higher side, a daily close above 1.4173 is needed to put the bulls back into the driver’s seat. 

A drop to 1.3845 looks likely as risk sentiment looks to have been buoyed by reports that Saudi Arabia would be raising its oil prices in a bid to stabilize globe crude and US and Chinese diplomats are planning to re-establish trade-talks beginning next week. 

Daily chart

Trend: Bearish

Technical levels