USD/CAD consolidates recent strong gains to over 2-month tops

   •  Subdued USD/US bond yields fail to provide a fresh bullish impetus.
   •  Traders look forward to the US macro data/Powell’s second testimony. 

The USD/CAD pair oscillated in a narrow trading range, just below mid-1.2800s, and was seen digesting recent strong gains to over two-month tops. 

The pair built on this week's strong upsurge from Monday's intraday low level of 1.2615 and continued gaining some positive traction on Thursday amid the prevalent strong US Dollar bullish sentiment. 

The USD, however, now seems to have entered a bullish consolidation phase, primarily on the back of subdued action around the US Treasury bond yields, and thus, failed to provide any fresh bullish impetus. 

Adding to this, a modest gain in crude oil prices, which tends to drive demand for the commodity-linked currency - Loonie, was also seen collaborating towards keeping a lid on any further up-move, at least for the time being. 

Moving ahead, traders now look forward to a flurry of US economic releases, with the key focus on ISM manufacturing PMI, for some fresh impetus. Apart from the US macro data, the Fed Chair Jerome Powell's second appearance before the Congress would play a key role in determining the pair's next leg of directional move. 

Technical levels to watch

Momentum beyond mid-1.2800s is likely to get extended towards the 1.2900 handle, above which the pair seems all set to surpass 1.2915-20 supply zone and build on its recent bullish momentum. 

On the flip side, the 1.2800 handle now seems to protect the immediate downside, which if broken might prompt some additional profit-taking and accelerate the fall towards 1.2755 intermediate support.