Despite the rise in oil prices, the Loonie is having trouble pushing past the rising trend line on its daily time frame.

As you can see from the chart, the pair has made several tests of this established rising support zone and might continue to stay above this level.

However, continued downward pressure on oil supply and the corresponding upward pressure on oil prices is expected to build up in the coming days. After all, the tensions in Egypt and surrounding nations appear to be getting worse and could cause disruptions in the operations of oil-producing firms in the region.

If that’s the case, USD/CAD could finally breach the trend line and start a new downtrend. For now, it appears the pair has formed a complex head and shoulders pattern with a rising neckline currently around the 1.0300 handle.

By Kate Curtis from Trader’s Way