USD/CAD consolidates in a range, around mid-1.3100s

The USD/CAD pair lacked any firm direction seesawed between tepid gains/minor losses, around mid-1.31000s through the early European session on Monday.

The pair was seen oscillating in a narrow trading band on the first day of a new trading range and remained well below the previous session's swing highs near the 1.3180 region, touched in reaction to mostly upbeat US economic data and dismal Canadian retail sales figures.

Data released on Friday confirmed that the US economy expanded by 2.1% annualized pace during the third quarter of 2019. This was complemented by an upward revision of the University of Michigan's Consumer Confidence Index and better-than-expected personal income/spending data.

On the other hand, Canadian monthly retail sales plunged by 1.2% in October as against consensus estimates pointing to a 0.5% growth. Adding to this, core retail sales (excluding automobiles) also fell short of market expectations and came in to show a decline of 0.5%.

As investors looked past Friday's diverging US-Canadian macro releases, a subdued US dollar demand failed to impress bullish traders or provide any meaningful impetus. The downside, however, remained cushioned amid a softer tone around crude oil prices.

Oil prices edged lower on the back of Friday's Baker Hughes report, which showed that the US drillers added 18 rigs during the week to December 20. The increase marked the most in a week since February 2018 and weighed on the commodity-linked currency – loonie.

Moving ahead, market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders data. This coupled with the monthly Canadian GDP growth figures might further contribute towards producing some short-term trading opportunities.

Technical levels to watch