USD/CAD sits near 1-week tops, just below mid-1.3000s

• USD/CAD consolidated the previous session’s goodish intraday positive move.
• A subdued USD/oil price action led to the range-bound price action on Thursday.

The USD/CAD pair was seen oscillating in a range just below mid-1.3000s and consolidated the previous session's goodish positive move of around 70 pips.

The pair on Wednesday reversed an early dip to an intraday low level of 1.2976 and turn higher amid tumbling crude oil prices, which fell nearly 9% from the daily swing high and weighed heavily on the commodity-linked currency – loonie.

Overnight slump in oil prices weighed on CAD

The de-escalation of geopolitical tensions in the Middle East led to a sharp intraday turnaround in oil prices. The intraday selloff accelerated further after the US President Donald Trump refrained from further military action against Iran.

Trump’s speech soothed investors’ jitters over the situation in the Middle East and helped boost investor' appetite for perceived riskier assets. Improving global risk sentiment triggered a goodish intraday rally in the US Treasury bond yields.

This eventually extended some support to the US dollar, which was already underpinned by the stronger ADP report, showing that private-sector employers added 202K jobs in December as compared to the previous month's upwardly revised reading of 124K.

The greenback now seems to have entered a consolidation phase and hovered around the 97.00 handle on Thursday. This coupled with some stability in oil prices further contributed to the pair's subdued/range-bound price action through the early European session on Thursday.

It will now be interesting to see if the pair is able to capitalize on the momentum and build on its recovery move from multi-month lows set earlier this week or continues with its sideways price action amid absent relevant market moving economic releases from the US or Canada.

Technical levels to watch