USD/CAD pares the biggest daily jump in two weeks near 1.3600 despite sluggish Oil price

• USD/CAD prints mild losses, holds lower ground near intraday bottom of late.
• WTI crude oil bears struggle for clear directions amid holiday mood, mixed sentiment.
• US Dollar traces a retreat in the US Treasury yields amid inactive markets.

USD/CAD remains depressed around the intraday low of 1.3588 amid the quiet markets during early Thursday.

In doing so, the Loonie pair consolidates the biggest daily gains in a fortnight as the US Treasury yields weigh on the US Dollar. That said, the softer prices of WTI crude oil, Canada’s key export item, join the market’s mixed mood to restrict the quote’s immediate downside.

USD/CAD jumped the most in two weeks the previous day as doubts over China’s Covid statistics and methods of unlock seem to have challenged the previous optimism.

News from Reuters suggesting inconsistent virus details from Beijing and multiple economies announcing fresh testing requirements from China previously weighed on the market sentiment and propelled the US Treasury yields. “China reported three new COVID-related deaths for Tuesday, up from one for Monday - numbers that are inconsistent with what funeral parlors are reporting, as well as with the experience of much less populous countries after they re-opened,” reported Reuters.

Recently the UK joined the line of the US South Korea, Japan, Taiwan, Italy and India to unveil fresh Covid test requirements for visitors from China.

On the other hand, Russia’s rejection of peace with Ukraine unless it accepts the treaty allowing additional territories to join Moscow weighs on the market sentiment and defends the USD/CAD bulls, despite the latest pullback.

Elsewhere, WTI crude oil prints 0.30% intraday losses around $78.50, falling for the third consecutive day, as demand fears due to China-linked headlines join Russia’s inability to highlight the supply crunch woes.

Amid these plays, the S&P 500 Futures seesaw around 3,810 whereas the US 10-year Treasury yield makes rounds to 3.87% after rising the most since October 19 the previous day.

Looking forward, risk catalysts will be more important for clear directions while US Initial Jobless Claims will decorate the economic calendar.

Technical analysis

USD/CAD takes a U-turn from the previous support line stretched from mid-November, around 1.3615 by the press time. However, the 50-DMA level of 1.3530 acts as the short-term key support.