- A subdued USD demand failed to assist USD/CAD to build on the recent positive move.
- Slightly weaker oil prices undermined the loonie and helped limit any meaningful slide.
The USD/CAD pair held steady above the 1.3300 handle, with bulls still awaiting a sustained break through a 5-1/2-month-old descending trend-line resistance.
The pair extended its sideways consolidative price action for the second consecutive session on Tuesday, though remained well within the striking distance of over five-week tops set last week. A combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound trading through the early European session.
Weaker oil prices offset subdued USD demand
As investors digested the incoming positive trade-related headlines, the USD treads water and turned out to be one of the key factors holding traders from placing any fresh bullish bets. The downside, however, remained cushioned amid slightly weaker oil prices, which tend to undermine demand for the commodity-linked currency – loonie.
From a technical perspective, the pair has repeated failed to capitalize on its strength above the very important 200-day SMA and failed near mentioned barrier, making it prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move.
Moving ahead, Tuesday’s US economic docket – featuring the release of the Conference Board’s Consumer Confidence Index and Richmond Manufacturing Index – will now be looked upon for some meaningful trading opportunities later during the North-American session.
Technical levels to watch
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