The USD/CAD pair extended its consolidative price action through the early European session on Thursday and remained confined in a narrow trading range, just below the 1.3200 handle. Yesterday’s BOC monetary policy update turned out to be a non-event for the major, with a combination of factors holding investors back from placing any aggressive bets and leading to a range-bound price action on Thursday. As of writing this article, the pair is trading flat at 1.3175 down by 0.02% on the day. The US Dollar lacked any firm directional bias and was seen consolidating in a range around the key 95.00 psychological mark.
Investors Look to US Macro Data For Short Term Opportunities
Investors also seemed to wait for any fresh update over the progress in talks to revise the North American Free Trade Agreement (NAFTA) before positioning for the next leg of directional move. Meanwhile, a mildly positive tone around crude oil prices extended some support to the commodity-linked currency – Loonie and turned out to be the only factor behind a modest down-tick, back closer to overnight swing lows. Traders now look forward to the US economic docket, highlighting the release of ADP report and ISM non-manufacturing PMI, in order to grab some short-term opportunities. The key focus, however remains on Friday’s keenly watched employment details, both from the US and Canada.
When looking from a technical perspective, The bearish divergence of the hourly chart relative strength index is signaling bullish exhaustion in the USD/CAD, however, pull back, if any, will likely be short-lived as the stacking order of the 50-hour moving average (MA), above the 100-hour MA, above the 200-hour MA, a classic bullish setup, indicates the path of least resistance is on the higher side.The 1.3155-50 zone might continue to act as an immediate support, which if broken is likely to accelerate the fall back towards 50-day SMA support, currently near the 1.3100-1.3095 region. On the flip side, bulls will be eyeing for a sustained move beyond the 1.3200 handle, above which the pair is likely to aim towards testing the 1.3265-70 supply zone ahead of the 1.3300 round figure mark.