USD/CAD in search of a firm direction, stuck in a range, below 1.3300 mark
- USD/CAD continued with its range-bound price action for the second straight day.
- Rebounding US bond yields revived the USD demand and extended some support.
- Positive oil prices underpinned the loonie and kept a lid on any strong positive move.
The USD/CAD pair continued with its struggle to move back above the 1.3300 round-figure mark and remained confined in a two-day-old trading range.
A combination of diverging forces failed to provide any meaningful impetus to the major, rather led to a subdued/range-bound trading action for the second consecutive session on Wednesday.
Traders await a fresh catalyst
Despite concerns about the economic fallout from the coronavirus outbreak, a modest recovery in the risk sentiment allowed the US Treasury bond yields to stage a goodish bounce from all-time lows.
In fact, the yield on the benchmark 10-year bond was up around 3% at one point, which eventually helped revive the US dollar demand and turned out to be one of the key factors lending some support.
The positive factor, to some extent, was offset by a modest pickup in crude oil prices, which underpinned demand for the commodity-linked currency – the loonie – and kept a lid on any meaningful gains.
Meanwhile, the coronavirus outbreak fueled fears about a downturn in consumption might cap any runaway rally for oil prices and might assist the pair to regain some traction beyond the 1.3300 mark.
There isn't any major market-moving economic data due for releases on Wednesday, either from the US or Canada. Hence, the USD/oil price dynamics will be looked upon for some short-term opportunities.
Technical levels to watch