- A sharp fall in oil prices undermined the loonie and provided a modest intraday lift to USD/CAD.
- Retreating US bond yields kept the USD bulls on the defensive and capped any meaningful gains.
- Investors now look forward to US economic data for some impetus ahead of Macklem’s speech.
The USD/CAD pair faded an intraday bullish spike to the 1.2145 region and is now headed towards the lower end of its intraday trading range. The pair was last seen hovering around the 1.2110 region, down over 0.15% for the day heading into the North American session.
A sharp intraday slump in crude oil prices undermined the commodity-linked loonie and provided a modest lift to the USD/CAD pair during the early part of the European session. The uptick, however, lacked any strong follow-through buying and ran out of steam rather quickly amid a broad-based US dollar weakness.
As investors looked past hawkish FOMC minutes, retreating US Treasury bond yields failed to assist the USD to capitalize on the overnight bounce from multi-month lows. This, in turn, held bullish traders from placing any aggressive bets and kept a lid on any further gains for the USD/CAD pair, at least for the time being.
Meanwhile, a weaker risk sentiment – as depicted by a fresh leg down in the US equity futures – also did little to lend any support to the safe-haven USD. Market participants now look forward to the US economic docket, featuring the release of the Philly Fed Manufacturing Index and the usual Initial Weekly Jobless Claims.
Apart from this, the US bond yields could influence the USD and provide some impetus to the USD/CAD pair. Traders might further take cues from oil prices dynamics, which, along with a scheduled speech by the Bank of Canada Governor Tiff Macklem should produce some meaningful trading opportunities around the major.
Technical levels to watch
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