USD/CAD in search of a firm direction, stuck in a range around mid-1.3100s

   “¢   Subdued USD price action does little to provide any meaningful lift.
   “¢   Bullish oil prices underpin Loonie and further collaborate towards capping.

The USD/CAD pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Wednesday.

The pair stalled overnight rejection slide from the 1.3200 neighborhood and found some support near the 1.3140-35 region amid subdued US Dollar price action. Ahead of a key meeting between the US President Donald Trump and European Commission President Jean-Claude Juncker, the greenback remained stuck in a narrow band and did little to provide any meaningful lift.  

Meanwhile, crude oil prices remained supported by overnight API report that showed a fall of 3.16 million barrels in the US inventories for the week ending July 21, which underpinned demand for the commodity-linked currency – Loonie and further collaborated towards keeping a lid on any meaningful up-move for the major.

In absence of any major market-moving economic data, traders are likely to take cues from the official EIA report on the US crude oil inventories. The key focus, however, would be on this week’s other US macro releases, particularly the advance Q2 GDP growth figures, which should assist investors to determine the pair’s next leg of directional move.  

Technical levels to watch

Any meaningful downfall is likely to find support near the 1.3115 level, below which the pair is likely to aim towards testing 50-day SMA support near the 1.3090 region. On the upside, momentum beyond the 1.3165-70 immediate resistance might continue to confront fresh supply near the 1.3200 handle, which if cleared might trigger a near-term short-covering bounce.