USD/CAD consolidates recent losses to multi-week lows, just above 1.3100 handle

• USD/CAD was seen oscillating in a range on Thursday.
• Subdued USD/oil price dynamics did little to influence.
• Traders now eye second-tier data for a fresh impetus.

The USD/CAD pair was seen oscillating in a narrow trading band through the early European session on Thursday and consolidated the overnight slide to seven-week lows.

The pair came under some aggressive selling pressure during the North-American session on Wednesday and tumbled to the 1.3100 round-figure mark – the lowest level since late October. As investors looked past Wednesday's mostly in line Canadian consumer inflation figures, the commodity-linked currency – loonie got a strong boost in the wake of a late pickup in crude oil prices.

Oil prices rallied to near three-month highs after the Energy Information Administration (EIA) showed in its weekly report that US crude inventories fell by 1.085 million barrels during the week ended December 13. This comes on the back of the recent optimism led by deeper output cuts by major producers and the phase one US-China trade deal and remained supportive of the bullish run.

With oil prices now entering a bullish consolidation phase, the selling pressure surrounding the pair now seems to have abated, at least for the time being. However, a subdued US dollar price action did little to impress bulls or assist the pair to register any meaningful recovery and led to a subdued/range-bound price action through the early European session on Thursday.

The USD bulls remained on the defensive after the US House of Representatives on Wednesday voted to impeach the US President Donald Trump for abuse of power and obstruction of Congress. Although Trump is likely to survive a trial in the GOP-led Senate next month, the uncertainty seemed to be the only factor that weighed on the sentiment surrounding the greenback.

Moving ahead, market participants now look forward to some second-tier economic releases for a fresh impetus. Thursday's economic docket features the release of the usual initial weekly jobless claims Philly Fed Manufacturing Index and existing home sales data from the US. This coupled with the ADP report on Canadian private sector employment might produce some short-term trading opportunities.

Technical levels to watch