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  • USD/CAD remained well within the previous day’s broader trading range.
  • A subdued USD failed to impress bulls or provide any meaningful impetus.
  • A modest uptick in oil prices underpinned the loonie and might cap gains.

The USD/CAD pair edged higher during the early European session, albeit remained well within the previous day’s broader trading range, just above mid-1.3600s.

A combination of diverging forces failed to provide any meaningful impetus, or assist the pair to build on this week’s goodish rebound from the very important 200-day SMA – levels below the key 1.3500 psychological mark.

The US dollar was seen consolidating its gains recorded over the past two trading sessions. Meanwhile, growing worries about a surge in new coronavirus cases continued underpinning the greenback’s safe-haven demand.

The supporting factor, to some extent, was negated by a modest intraday uptick in crude oil prices, which extended some support to the commodity-linked currency – the loonie – and capped the upside for the USD/CAD pair.

Looking at the technical picture, the USD/CAD pair this week broke through a one-week-old descending trend-line resistance near the 1.3600 mark. The breakout might have already shifted the near-term bias in favour of bulls.

However, it prudent to wait for some strong follow-through buying, possibly beyond last week’s swing high near the 1.3685 region, before bullish traders start positioning for any further near-term appreciating move.

Market participants now look forward to second-tier US macro data for some impetus. Friday’s US economic docket features the release of Core PCE Price Index, Personal Income/Spending data and revised June Michigan Consumer Sentiment Index.

Technical levels to watch