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  • A subdued USD demand, weaker Oil prices failed to provide any meaningful impetus.
  • Thursday’s speech by BoC Governor Poloz will be eyed for a fresh directional impetus.

The USD/CAD pair consolidated its recent gains to multi-week tops and was seen oscillating in a narrow trading band, around the 1.3300 handle through the mid-European session on Thursday.
A combination of diverging factors failed to provide any meaningful impetus or assist the pair to build on the solid gains recorded over the past two trading session, though bulls have still managed to defend the very important 200-day SMA.

Focus shifts to Poloz’s speech

The US dollar remained on the defensive on the back of Wednesday’s FOMC minutes, which revealed that policymakers see downside risks to the economic outlook and that the recent monetary easing was appropriate due to global weakness.
Meanwhile, the USD bulls seemed unimpressed by a goodish intraday pickup in the US Treasury bond yields, rather took cues from escalating US-China political tensions, especially after the passage of a bill that supports Hong Kong protesters.
The negative factor, to a larger extent, was largely negated by the prevalent weaker tone surrounding oil prices, which undermined demand for the commodity-linked currency – loonie and helped limit any meaningful pullback.
Given that US-China standoff has extended beyond trade, oil prices edged lower on Thursday amid growing market concerns that the Phase-One deal to end a trade war between the world’s two largest economies may be delayed further.
Apart from this, investors also seemed reluctant to place any aggressive bets and preferred to wait on the sideline ahead of the BoC Governor Stephen Poloz’s speech, scheduled during the early North-American session this Thursday.
From a technical perspective, bulls are likely to wait for a sustained breakthrough a 5-1/2 month-old descending trend-line resistance before positioning for any further near-term appreciating move amid relatively thin economic docket.

Technical levels to watch