- A combination of supporting factors does not help the USD / CAD to take advantage of the bounce of the previous day.
- Investors prefer to wait on the sidelines before the release of US consumer inflation figures.
The pair USD / CAD it lacks a firm directional bias and remains trapped within a tight range during the first half of Thursday’s European session. At the time of writing, the pair is virtually unchanged on the day. around 1.2110.
The pair has struggled to capitalize on the good bounce the day before, from near the 1.2050 region at weekly lows, and has been witnessed moderate and limited price action within a range on Thursday. That being said, a combination of factors has offered some support and helped the USD / CAD pair to hold steady above the 1.2100 level.
The US dollar has gained traction amid some repositioning ahead of the release of inflation figures to the US consumer, which will be released later at the start of the American session. Aside from this, a modest rally in US Treasury yields has further benefited the dollar and acted as a tailwind for the USD / CAD pair.
On the other hand, a softer tone in the oil market has weighed on the loonie, a currency linked to commodity prices, and has been considered as another support factor for the USD / CAD pair. WTI Crude Oil Has Witnessed Some Profit Taking after Wednesday’s EIA report indicated weaker-than-expected fuel demand at the start of the US summer travel season.
However, investors seem reluctant to open aggressive positions and prefer to wait on the sidelines before US consumer inflation figures. The IPC report will be an important macroeconomic data that will set the tone for the June FOMC meeting and influence the USD. This, in turn, could provide further directional momentum to the USD / CAD pair.
USD / CAD technical levels
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