- USD/CAD holds steady above mid-1.3000s, still below the overnight swing high.
- A subdued USD demand, weaker oil failed to provide any meaningful impetus.
- Friday’s US/Canadian jobs report eyed for some short-term trading opportunities.
The USD/CAD pair was seen oscillating in a narrow trading band, just above mid-1.3000s and remained well below two-week tops set in the previous session.
The pair on Thursday gained some follow-through traction and recovered farther from multi-week tops set earlier this week amid some follow-through US dollar appreciation. The greenback remained well supported by higher US Treasury bond yields, amid the de-escalation of geopolitical tensions in the Middle East.
Traders preferred to stay on the sidelines
It is worth recalling that the prospect of war in the Middle East ebbed on Wednesday after the US President Donald Trump signalled that there will be no further military action against the Islamic Republic. The pair rallied to levels just above the 1.3100 handle but failed to capitalize, rather ran out of the steam at higher levels.
A modest intraday bounce in oil prices extended some support to the commodity-linked currency – loonie and turned out to be one of the key factors that prompted some selling at higher levels. The downside, however, remained cushioned, at least for now, ahead of Friday’s important release of monthly jobs report from the US and Canada.
Heading into the key event risk, investors might refrain from placing any aggressive bets, which might eventually lead to an extension of the range-bound trading action amid a subdued USD demand and a mildly weaker tone surrounding oil prices.
Technical levels to watch