- A goodish bounce in Oil prices underpin Loonie and capped early uptick.
- The USD recovers early lost ground and helped limit any meaningful slide.
- Traders now eye US economic data/EIA report for some short-term impetus.
The USD/CAD pair failed to capitalize on the early European session uptick and quickly reversed around 20-pips in the last hour.
After a goodish bounce on the first day of a new week and a subsequent pullback on Tuesday, the pair had some good two-way moves over the past couple of trading session and now seems to have entered a consolidation phase. A combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action through the early European session on Wednesday.
After a steep fall in the previous session, Crude Oil prices edged higher on Wednesday, rising around 0.8% for the day, and extended some support to the commodity-linked currency – Loonie, which eventually turned out to be one of the key factors that kept a lid on the pair’s attempted intraday up-move.
The negative factor, to a larger extent, was negated by a modest pickup in demand for the US Dollar, which managed to recover early lost ground despite the ongoing slump in the US Treasury bond yields to fresh multi-year lows and helped limit deeper losses, at least for the time being.
Moving ahead, Wednesday’s US economic docket – featuring the ADP report on private-sector employment and ISM non-manufacturing PMI, which followed by EIA report on weekly US Oil inventories will now be looked upon for some meaningful trading opportunities later during the North-American session.
Technical levels to watch
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