USD/CAD holds steady near mid-1.4000s, focus remains on OPEC+ meeting

• USD/CAD edges higher for the second consecutive session on Thursday.
• Bulls seemed unaffected by a subdued USD demand, surging oil prices.
• Thursday’s important macro data, OPEC+ meeting eyed for a fresh impetus.

The USD/CAD pair traded with a mild positive bias on Thursday and is currently placed near session tops, around mid-1.4000s, albeit lacked any follow-through.

Following the previous session’s intraday pullback, the pair managed to regain some positive traction for the second straight session amid a subdued trading action on Thursday. The uptick seemed rather unaffected by a combination of negative factors and could be attributed to some repositioning trade ahead of key data/event risks.

The US dollar remained on the defensive in the wake of the latest optimism over forecasts that the coronavirus pandemic may be reaching its peak soon. This coupled with a mildly weaker tone surrounding the US Treasury bond yields further weighed on the greenback demand, albeit failed to attract fresh selling around the pair.

Bulls even shrugged off a strong intraday rally in crude oil prices, which tend to undermined demand for the commodity-linked currency. Against the backdrop of improving risk sentiment, oil prices rallied over 4% for the day amid expectations the world’s largest oil producers would agree to cut production at a meeting later this Thursday.

Traders, however, seemed reluctant to place any aggressive bearish bets, rather preferred to wait for the final outcome. This coupled with the release of important macro data from the US and Canada, along with a scheduled speech by the Fed Chair Jerome Powell will play a key role in determining the pair’s next leg of a directional move.

The US economic docket highlights the release of initial weekly jobless claims, expected to have eased off a little from the huge 6.65 million the week before but still post a rise of 5.25 million during the week ended April 3. Apart from this, the monthly Canadian employment details might also provide some meaningful trading impetus.

Technical levels to watch