- USD/CAD was seen oscillating in a range around the 1.2400 mark on Thursday.
- Bullish oil prices underpinned the loonie and capped the upside for the major.
- A modest USD strength helped limit any losses ahead of the US macro releases.
The USD/CAD pair extended its sideways consolidative price action through the first half of the European session and remained confined in a range around the 1.2400 mark.
A combination of diverging forces failed to provide any meaningful impetus, or assist the USD/CAD pair to build on this week's positive move. The recent bullish run in crude oil prices continued underpinning the commodity-linked loonie and capped gains for the major. That said, a modest US dollar strength extended some support and helped limit the downside.
The USD climbed to the highest level since April amid speculations that the Fed will tighten its monetary policy if price pressures continue to intensify. The expectations were cemented by hawkish comments from Dallas Fed President Robert Kaplan, saying that they are seeing a broadening of price pressures and would prefer to taper sooner than the end of the year.
Apart from this, a strong pickup in the US Treasury bond yields further acted as a tailwind for the greenback. However, the lack of any strong follow-through buying warrants some caution for bullish traders and positioning for any further appreciating move. Market participants now look forward to important US macro data for some short-term trading impetus.
The US economic docket highlights the release of the usual Initial Weekly Jobless Claims and ISM Manufacturing PMI later during the early North American session. This, along with the US bond yields, will drive the USD. Traders might further take cues from headlines coming out of the OPEC+ meeting, which will influence oil price dynamics and produce some meaningful opportunities.
Technical levels to watch
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