USD/CAD in search of a firm direction, holds steady above mid-1.3100s
- A modest pullback in the US bond yields kept the USD bulls on the defensive.
- Weaker Crude Oil prices undermined the Loonie and helped limit the downside.
The USD/CAD pair lacked any firm directional bias and was seen oscillating in a narrow trading band, around mid-1.3100s through the early European session on Wednesday.
A combination of diverging forces – including a subdued US Dollar price action and weaker Oil prices – failed to assist the pair to build on the overnight late rebound from near one-week lows and led to a subdued/range-bound trading action on Wednesday.
Weaker Oil prices lend some support
As investors looked past Tuesday's upbeat US ISM Non-manufacturing PMI, a modest pullback in the US Treasury bond yields held the USD bulls on the defensive and did little to provide any meaningful impetus to the major, rather capped the upside.
The negative factor, to a larger extent, was offset by some follow-through pullback in Crude Oil prices, which undermined demand for the commodity-linked currency – Loonie and helped limit any further downside for the major, at least for the time being.
Oil prices remained depressed on the back of the overnight API report, which showed that US inventories rose by 4.3 million barrel in the week ended November 1, and overshadowed growing optimism over a possible US-China trade deal later this month.
It will now be interesting to see if the pair is able to gain any traction or continues with its lacklustre trading action amid absent relevant economic releases, though a scheduled speech by Chicago Fed President Charles Evans might provide some short-term trading impetus.
Technical levels to watch
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
