USD/CAD clings to gains near session tops, just above 1.3400 mark

• USD/CAD regains some positive traction despite some follow-through USD selling.
• Tumbling US bond yields, Fed rate cut speculations weighed heavily on the USD.
• Softer oil prices undermined the loonie and seemed to be a key factor supporting.

The USD/CAD pair traded with a mild positive bias through the mid-European session and is currently placed near the top end of its daily trading range, just above the 1.3400 mark.

Following the previous day’s post-BoC volatile swings, the pair managed to regain some positive traction on Thursday and seemed rather unaffected by the emergence of a fresh US dollar selling pressure.

Bulls seemed unaffected by weaker USD

A sharp intraday turnaround in the US Treasury bond yields, accompanied with increased odds for another 50 bps Fed rate cut at the upcoming FOMC meeting on March 18 weighed heavily on the greenback.

Bullish traders, however, took cues from a mildly weaker tone surrounding crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie – and remained supportive.

It will now be interesting to see if the pair is able to capitalize on the move back above the 1.3400 round-figure mark or continues with its struggle to find acceptance at higher levels and meets with some fresh supply.

In absence of any major market-moving economic releases, either from the US or Canada, the incoming headlines from the highly anticipated OPEC meeting will play a key role in influencing the momentum.

Technical levels to watch