“¢ A goodish pickup in the US bond yields helps ease persistent USD selling pressure.
“¢ Bullish oil prices offsetting the positive factor and caps even a minor recovery attempt.
“¢ Traders now eye US economic data/FOMC minutes eyed for some short-term impetus.
The USD/CAD pair extended its consolidative price action and remained confined in a narrow trading range, just below mid-1.3100s.
A combination of diverging factors failed to assist the pair to register any meaningful recovery and move away from 2-1/2 week lows, set in the previous session. The recent US Dollar selling bias now seems to have abated on the back of a goodish pickup in the US Treasury bond yields and was seen lending some support to the major.
However, the ongoing upsurge in crude oil prices continues to underpin the commodity-linked currency – Loonie and kept a lid on any minor recovery attempt, leading to a subdued/range-bound price action for the second consecutive session.
Traders now look forward to the US economic docket, featuring the release of ADP report on private sector employment and ISM non-manufacturing PMI. This followed by weekly crude oil inventories data and the latest FOMC meeting minutes might provide some fresh impetus, albeit the key focus would remain on Friday’s monthly jobs report from the US and Canada.
Technical levels to watch
Immediate support remains near the 1.3110-1.3100 region, which if broken might accelerate the slide towards 1.3065-60 intermediate support en-route 50-day SMA near the key 1.3000 psychological mark.
On the flip side, sustained move beyond the 1.3160 immediate resistance has the potential to assist the pair to surpass the 1.3200 handle and retest weekly highs resistance near the 1.3225 region.
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