- The USD consolidates overnight strong upsurge amid sliding US bond yields.
- A sudden pickup in Oil prices underpinned Loonie and exerted some pressure.
The USD/CAD pair edged lower through the early European session on Thursday and is currently placed at the lower end of its daily trading range, around mid-1.3200s.
The pair continued with its struggle to capitalize on its attempted bullish moves and remained below the very important 200-day SMA, well within a broader trading range held over the past one week or so. After the overnight strong upsurge, the US Dollar now seems to have entered a bullish consolidation phase amid a modest pullback in the US Treasury bond yields and failed to assist the pair to build on the overnight gains.
Bullish Oil prices exert some pressure
This coupled with an intraday bullish spike in Crude Oil prices underpinned demand for the commodity-linked currency – Loonie and seemed to be one of the key factors exerting some fresh downward pressure on the major. As investors looked past an unexpected rise in US inventories, Oil prices regained some positive traction on the back of renewed optimism about a meaningful progress on the US-China trade deal.
It is worth mentioning that the US President Donald Trump on Wednesday told reporters in New York that both the sides are having some very good conversations on trade and an agreement could happen sooner than anyone thinks. The remarks helped ease concerns of a sharp global economic slowdown and raised hopes that global Oil demand will increase. The US and China bot are the world’s biggest oil importers.
It will now be interesting to see if the pair continues to attract some buying interest at lower levels or the recent repeated failures to sustain above the 1.3300 handle marks the end of the recent positive move and the resumption of the prior bearish trajectory amid absent relevant market-moving economic releases – either from the US or Canada.
Technical levels to watch