USD/CAD confined in a range, around 1.3300 mark ahead of US Consumer Confidence

• The USD/CAD pair continued with its struggle to make it through a key barrier.
• A subdued USD demand, positive oil prices both contributed towards capping.

The USD/CAD pair extended its sideways consolidative price action through the early North-American session and remained confined in a narrow trading band around the 1.3300 handle.

A combination of negative forces failed to assist the pair to capitalize on the intraday uptick. The pair continued with its struggle to make it through a multi-month descending trend-line resistance in the wake of a mildly softer tone surrounding the US dollar.

Despite encouraging signs of progress in the US-China trade talks, a sharp intraday pullback in the US Treasury bond yields weighed on the greenback demand. This eventually turned out to be one of the key factors that kept a lid on the pair’s attempted intraday positive move.

The USD bulls seemed unimpressed by an unexpected fall in the US trade deficit figures, which dropped nearly 6% to $66.5 billion in October from $70.5 billion previous. The report also revealed a 0.2% increase in the US wholesale inventories, though was largely ignored by the market participants.

Apart from a subdued USD price action, the upside was further capped by a modest intraday pickup in crude oil prices. In fact, WTI crude oil was now up around 0.5% for the day and was seen underpinning demand for the commodity-linked currency – loonie.

Hence, it will be prudent to wait for a sustained move beyond the mentioned barrier before positioning for any further near-term appreciating move. Moving ahead, market participants now look forward to the release of the Conference Board’s Consumer Confidence Index for a fresh impetus.

Technical levels to watch