- USD/CAD was seen oscillating in a range through the Asian session on Friday.
- Bullish oil prices underpinned the loonie and capped the upside for the pair.
- The USD consolidated its recent gains and failed to provide any fresh impetus.
The USD/CAD pair lacked any firm directional bias and remained confined in a range, above the 1.2800 mark through the Asian session on Friday.
A combination of factors failed to assist the pair to capitalize on the previous day’s positive move, instead led to a subdued/range-bound price action on the last trading day of the week. The US dollar was seen consolidating its recent strong gains to over two-month tops. Apart from this, the prevalent bullish sentiment surrounding crude oil prices continued underpinning the commodity-linked loonie and further collaborated towards capping gains for the USD/CAD pair.
The greenback has been strengthening recently amid hopes for massive fiscal spending, progress with coronavirus vaccinations and signs of a strong economic recovery. Expectations of a larger government borrowing to fund the stimulus pushed the benchmark 10-year US government bond yields closer to 10-month tops touched in January. This, along with the incoming positive US economic data, continued underpinning the greenback and extended some support to the USD/CAD pair.
Meanwhile, the supporting factor, to a larger extent, was offset by an extension of a bullish run in crude oil prices, which climbed to the highest level in a year. This, in turn, held traders from positioning for any further appreciating move. Investors also seemed reluctant, rather preferred to wait on the sidelines ahead of Friday’s release of monthly jobs reports from the US and Canada, due later during the early North American session.
Technical levels to watch