- USD/CAD struggles to capitalize on its recent positive move to five-month tops.
- Sliding US bond yields weighed on the USD and kept a lid on any further gains.
- Weaker oil prices undermined the loonie and helped limit any deeper losses.
The USD/CAD pair consolidated its recent gains to near five-month tops and was seen oscillating in a narrow trading band, just below mid-1.3300s.
A combination of diverging forces failed to assist the pair to capitalize on the overnight goodish positive move and led to a subdued/range-bound price action through the Asian session on Thursday.
Bulls seemed reluctant amid weaker USD
The prevailing risk-off mood led to an extension of the recent slump in the US Treasury bond yields to all-time lows, which kept the US dollar bulls on the defensive and kept a lid on any additional gains.
The negative factor, to a larger extent, was offset by some follow-through weakness in crude oil prices, which undermined demand for the commodity-linked currency – the loonie and helped limit the downside.
Oil prices continued losing ground on Thursday amid growing concerns over the global outbreak of the deadly coronavirus and its impact on the world economy, which might eventually lead to lower demand.
Looking at the technical picture, the pair already seems to have found acceptance above the 1.3330 supply zone. However, investors preferred to wait for a fresh catalyst before gearing up for any further appreciation.
Later during the early North-American session, important US macro releases – revised Q4 GDP print and Durable Goods Orders – might influence the USD price dynamics and provide some impetus.
This coupled with the release of Canadian current account figures might further contribute towards producing some meaningful trading opportunities ahead of Friday’s Canadian GDP report.
Technical levels to watch