USD/CAD consolidates in a range above 1.2100 mark, US CPI awaited

The USD/CAD pair lacked any firm directional bias and remained confined in a narrow band through the first half of the European session. The pair was last seen trading around the 1.2110-15 region, nearly unchanged for the day.

The pair struggled to capitalize on the previous day's goodish rebound from the vicinity of mid-1.2000s, or weekly lows and witnessed a subdued/range-bound price action on Thursday. That said, a combination of factors extended some support and assisted the USD/CAD pair to hold steady above the 1.2100 mark.

The US dollar gained follow-through traction amid some repositioning trade ahead of the US consumer inflation figures, due later during the early North American session. Apart from this, a modest pickup in the US Treasury bond yields further benefitted the greenback and acted as a tailwind for the USD/CAD pair.

On the other hand, a softer tone in the oil market undermined the commodity-linked loonie and was seen as another factor lending support to the USD/CAD pair. WTI crude oil witnessed some profit-taking after Wednesday's EIA report indicated weaker-than-expected fuel demand at the start of the summer driving season in the US.

Investors, however, seemed reluctant to place any aggressive bets, rather preferred to wait on the sidelines ahead of the US consumer inflation figures. The CPI report will be an important macro data that would set the tone for the June FOMC meeting and influence the USD. This, in turn, might provide a fresh directional impetus to the USD/CAD pair.

Technical levels to watch