The USD/CAD pair struggled to capitalize on the previous day's goodish rebound from multi-year lows and remained confined in a range above mid-1.2000s through the early European session. Crude oil prices extended the previous day's corrective slide from over two-month lows and slipped further below the $65.00/barrel mark on Wednesday. This was seen as a key factor that undermined the commodity-linked loonie and extended some support to the USD/CAD pair.
This, to a larger extent, was offset by the prevalent bearish sentiment surrounding the US dollar. This, in turn, held traders from positioning for any meaningful recovery and kept a lid on any meaningful recovery for the USD/CAD pair, at least for the time being. From a technical perspective, the pair's inability to register any meaningful recovery suggests that the near-term downtrend might still be far from being over. That said, oversold conditions on short-term charts warrant some caution before placing fresh bearish bets.