• A modest USD pullback from near two-year tops fails to provide any fresh bullish impetus.
• Weaker oil prices undermine Loonie and seemed to help limit the downside, at least for now.
• Investors’ focus remains glued to the important release of US Q1 GDP report later today.
The USD/CAD pair extended its sideways consolidative price action and remained confined in the post-BoC trading range, just below the key 1.3500 psychological mark.
With investors looking past the recent dovish tilt by the Bank of Canada, a combination of diverging forces failed to provide any meaningful impetus to the major and led to a subdued/range-bound price action through the early European session on the last trading day of the week.
Despite the overnight upbeat release of the US durable goods orders data, which surpassed even the most optimistic estimates, the US Dollar failed to capitalize on the recent bullish momentum, rather witnessed a modest pullback from the highest level since May 2017 and eventually capped the upside for the major.
However, a weaker tone surrounding crude oil prices, now down around 0.5% and slipping below the key $65.00/barrel mark, undermined demand for the commodity-linked currency – Loonie and turned out to be the only factor helping limit any sharp corrective slide, at least for the time being.
Traders also seemed reluctant to place any aggressive bets ahead of today’s key release of the advance US Q1 GDP report, which might influence market expectations about the Fed’s outlook when it announces its latest monetary policy update next Wednesday and help determine the pair’s near-term trajectory.
Technical levels to watch
The 1.3500 round figure mark, closely followed by the post-BoC swing high, around the 1.3520 level, might act as immediate barriers, above which the pair seems all set to aim towards reclaiming the 1.3600 handle with some intermediate resistance near the 1.3565-70 region.
On the flip side, immediate support is pegged near the 1.3460-50 region, which if broken might prompt some aggressive long-unwinding trade and accelerate the fall further towards challenging the 1.3400 round figure mark en-route the 1.3375-70 horizontal support.