- USD/CAD lacks any firm directional bias and remains confined in a range.
- A modest USD rebound extends support; positive oil prices capping gains.
The USD/CAD pair extended its sideways consolidative price action on Monday and remained confined well within the previous session’s trading range, around mid-1.3000s.
The pair on Friday failed to capitalize on the attempted intraday positive move and turned lower in reaction to upbeat Canadian employment details/weaker US monthly jobs report for December.
Traders remained on the sidelines
As investors looked past Friday’s disappointing NFP report, a modest US dollar rebound helped the pair to gain some positive traction, albeit a combination of factors capped any strong gains.
The USD uptick lacked any strong follow-through amid a weaker tone surrounding the US Treasury bond yields. This coupled with a mildly positive tone around oil prices kept a lid on the upside.
Oil prices found some support from growing optimism over the long-awaited phase-one trade deal between the world’s two largest economies and underpinned the commodity-linked currency – loonie.
It will now be interesting to see if the pair is able to gain any meaningful traction or continues with its consolidative trading action amid absent relevant market moving economic releases.
Later during the North-American session, the quarterly release of the BoC’s Business Outlook Survey report might influence the Canadian dollar and produce some short-term trading opportunities.
Technical levels to watch