- USD / CAD witnessed moderate / in-range price action on the last day of the week.
- A modest decline in oil prices undermined the loonie and helped limit the decline.
- The rally in US bond yields did little to impress USD bulls or give momentum.
The pair USD / CAD it extended its side consolidation price action and remained confined to a range above 1.2550 heading into the North American session.
The pair struggled to gain significant traction, or post a significant recovery from the week-long lows hit in the previous session, although a combination of factors helped limit the decline. A modest decline in oil prices undercut the commodity-linked loonie. This, coupled with a modest strength in the US dollar, acted as a tailwind for the USD / CAD pair.
The dollar maintained its modest intraday gains amid a sharp rally in US Treasury yields In fact, the benchmark 10-year US government bond yield once again approached the 1.30% level. That said, the momentum of risk appetite prevented bull traders from making aggressive bets around the safe-haven dollar and limited gains for the USD / CAD pair.
On the economic data front, Canadian Retail Sales showed a 2.1% drop in May versus market expectations of a 3% drop. This, in turn, extended some support to the domestic currency and further contributed to keeping any significant gains in the USD / CAD pair limited.
US bond yields and general market risk sentiment will influence the dollar. Traders could follow the signs of oil price dynamics to seize some near-term opportunities around the USD / CAD pair.
Technical levels
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