• USD/CAD consolidated the post-BoC volatile swings on Wednesday.
• A subdued oil/USD price action did little to provide any fresh impetus.
• Thursday’s key focus will remain on the highly anticipated OPEC meeting.

The USD/CAD pair extended the post-BoC consolidative price action through the early European session on Thursday and remained confined in a narrow trading band, just below the 1.3400 mark.

The pair had some good two-way price moves on Wednesday, albeit lacked any firm directional bias and finally settled nearly unchanged for the day. Following an early dip to the 1.3330-25 region, the pair caught some aggressive bids and rallied over 100 pips following the Bank of Canada's (Boc) policy decision.

Traders preferred to wait on the sidelines

At its March policy meeting on Wednesday, the BoC lowered its benchmark lending rates by 50 bps to 1.25%, in line with the Fed's surprise move on Tuesday. The move, however, was seen as more dovish than anticipated by market participants and eventually prompted some heavy selling around the Canadian dollar.

On the other hand, the US dollar found its footing on Wednesday and was further supported by stronger-than-expected US macro releases. The ADP report and the US ISM Non-Manufacturing PMI helped ease growing market concerns about the impact of the coronavirus outbreak on the US economy.

The pair jumped back closer to weekly tops but struggled to capitalize on the move. A mildly positive tone around crude oil prices extended some support to the commodity-linked currency – the loonie – and turned out to be the only factor capping gains, rather prompted some late selling around the major.

With oil prices holding steady ahead of the highly anticipated OPEC meeting on Thursday, a goodish pickup in the US Treasury bond yields underpinned the USD demand. Bulls, however, seemed rather unimpressed and preferred to wait for a fresh catalyst before positioning for the pair's next leg of a directional move.

Technical levels to watch