- A goodish pickup in Oil prices underpinned Loonie and exerts some pressure.
- The USD stands tall near multi-week tops and might help limit the downside.
- Traders now eye US durable goods orders data for some short-term impetus.
The USD/CAD pair traded with a mild negative bias on Thursday, albeit remained well within a two-day-old narrow trading band.
The pair continued with its struggle to make it through a key horizontal barrier near mid-1.3100s, with a modest pickup in Crude Oil prices underpinning the commodity-linked currency – Loonie and exerting some downward pressure on Thursday.
Against the backdrop of escalating geopolitical tensions in the Middle East, Oil prices were further supported by the overnight EIA report that showed US crude inventories fell by 10.84 million barrels for the week to July 16 – almost three times the level expected.
However, the prevalent bullish sentiment surrounding the US Dollar, amid diminishing odds of a 50 bps rate cut by the Fed at its upcoming meeting on July 30-31, might continue to attract some dip-buying interest and help limit any deeper losses, at least for the time being.
From a technical perspective, bulls are likely to wait for a sustained break through the mentioned hurdle before positioning for an extension of the recent recovery move from yearly tops and a possible move further beyond the 1.3200 round figure mark.
Thursday’s US economic docket – highlighting the release of durable goods orders data, might influence the USD price dynamics and produce some short-term trading opportunities later during the early North-American session.
Technical levels to watch
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