USD/CAD consolidates in a range above mid-1.2400s
| • Subdued USD action fails to provide fresh impetus.
• Bullish oil prices further capping the up-move.
The USD/CAD pair now seems to have entered a consolidation phase and was seen oscillating within a narrow trading range above mid-1.2400s.
The pair's overnight up-move stalled ahead of the key 1.2500 psychological mark, with a combination of factors failing to assist the pair to build on its modest recovery move from Friday's over 3-month lows.
A modest US Dollar retracement, primarily led by a sharp Yen appreciation, did little to provide any fresh impetus. This coupled with the prevailing strong bullish sentiment around oil markets, WTI crude oil hitting its highest level since December 2014, underpinned the commodity-linked currency - Loonie and further collaborated towards keeping a lid on any additional gains for the major.
It would now be interesting to see if the pair is able to catch any fresh bids or resumes with its depreciating slide amid growing prospects for a BOC rate hike move next week and absent market moving economic releases.
Technical levels to watch
Immediate strong resistance remains near the 1.2500 handle, above which the recovery move could get extended towards 1.2530-35 supply zone. On the flip side, follow-through weakness back below mid-1.2400s could drag the pair back towards retesting the 1.2400 handle.
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