USD/CAD consolidates in a range near multi-week lows, around mid-1.3100s

The USD/CAD pair struggled to register any meaningful recovery and remained well within the striking distance of six-week lows set in the previous ses  |  11/09/2019 11:15
  • The USD remains well supported by a follow-through upsurge in the US bond yields.
  • The prevailing bullish sentiment around Oil prices underpin Loonie and capped gains.

The USD/CAD pair struggled to register any meaningful recovery and remained well within the striking distance of six-week lows set in the previous session.
 
The pair lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Wednesday. A combination of diverging forces failed to provide any fresh impetus and led to a subdued/range-bound price action around the major.

Bullish Oil prices offset USD strength

Against the backdrop of growing optimism over the resumption of the US-China trade tensions, a strong follow-through upsurge in the US Treasury bond yields continued extending some support to the US Dollar and seemed to be one of the key factors that helped limit the downside.
 
The positive factor, to a large extent, was negated by the prevailing bullish sentiment around Crude Oil prices, which tend to underpin demand for the commodity-linked currency - Loonie and kept a lid on the overnight bullish attempt towards 50-day SMA barrier near the 1.3200 handle.
 
Moving ahead, market participants look forward to the US economic docket - featuring the release of Producer Price Index (PPI) and weekly Crude Oil inventories - for the required momentum to break through the daily consolidative trading range and grab some short-term trading opportunities.

Technical levels to watch

 

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