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  • USD/CAD is trading in a tight range above 1.2900 on Thursday.
  • WTI retreats below $45 as investors await OPEC to announce output strategy.
  • USD remains on the back foot, continues to weaken against major rivals.

The USD/CAD pair slumped to its lowest level since October 2018 at 1.2905 on Thursday and started to recover its losses. However, the pair met resistance around 1.2950 and turned south ahead of the American session. As of writing, USD/CAD was virtually unchanged on a daily basis at 1.2922.

Oil prices struggle to rise on Thursday 

Crude oil’s uninspiring performance seems to be limiting the CAD’s gains for the time being. Earlier in the day, Reuters reported that OPEC+ was looking to introduce an oil cut rollover with a gradual increase in the output. Pressured by the uncertainty surrounding the 2021 oil production strategy, the barrel of West Texas Intermediate is posting small daily losses at $44.80.

On the other hand, the broad-based USD weakness doesn’t allow USD/CAD to make a convincing recovery. The US Dollar Index is currently at its lowest level in more than two years at 90.83, losing 0.3% on the day. 

In the absence of significant fundamental drivers, the upbeat performance of major European currencies, especially the GBP, is making it difficult for the USD to find demand.

On Thursday, the US economic docket will feature the Department of Labor’s weekly Initial Jobless Claims report and the IHS Markit’s and the ISM’s services PMI figures.

Technical levels to watch for