USD/CAD remains confined in a range below 1.3300 mark

• USD/CAD continued with its struggle for a firm near-term direction.
• Sustained USD strength was seen as a key factor lending some support.
• Relief rally in oil prices underpinned the loonie and capped the upside.

The USD/CAD pair extended its sideways consolidative price move through the early European session and remained confined in a range below the 1.3300 mark.

A combination of diverging forces – a stronger US dollar and a goodish pickup in oil prices – failed to provide any meaningful impetus to the pair and led to a subdued, range-bound action for the third consecutive session on Thursday.

Traders remained on the sidelines

The greenback stood tall near two-month tops and remained well supported by the incoming stronger domestic data. This coupled with the ongoing positive momentum in the US Treasury bond yields provided an additional boost.

A further improvement in the risk sentiment – amid optimism over progress towards finding treatment for the coronavirus – continued weighing on traditional safe-haven assets and led to some follow-through upsurge in the US bond yields.

Meanwhile, the global risk-on flow contributed to the second day of a relief rally for crude oil prices, which underpinned demand for the commodity-linked currency – the loonie – and kept a lid on any strong positive move for the major.

The pair has been struggling to build on its momentum beyond the 1.3300 round-figure mark, which should now act as a key pivotal point for short-term traders amid absent relevant market-moving economic releases on Thursday.

Technical levels to watch