USD/CAD trades sideways through the mid-European session.
- The upbeat market mood dragged on the safe-haven USD limiting the pair’s upside.
- A softer tone surrounding oil prices undermined the CAD limiting deeper losses.
USD/CAD steadies around 1.26 after sliding overnight to fresh multi-year lows.
A combination of diverging forces led to range-bound trading through most of the European session on Thursday. Demand for the US dollar remained depressed in the risk-on environment, limiting gains for USD/CAD
Global risk sentiment was boosted by the increasing likelihood of huge US fiscal spending in 2021 under Joe Biden. This comes amid rising optimism over the COVID-19 vaccine rollouts, which also fuels expectations for a strong economic recovery.
Softer crude prices could limit the downside of the commodity-linked CAD. Oil prices were under pressure following a surprise build in US inventories.
on the hourly chart shows oversold conditions so bearish traders should consider waiting for follow-through selling below the 1.26.
Looking ahead US Initial Weekly Jobless Claims and housing market data will be in focus along with the Canadian ADP employment report.