* C$ flat at 96.53 U.S. cents
* Bond prices edge lower
By Claire Sibonney
TORONTO, July 26 (Reuters) - The Canadian dollar traded sideways against its U.S. counterpart on Monday, lacking significant direction as equities were mixed ahead of key U.S. economic data.
U.S. stock index futures were flat in advance of new home sales figures later in the morning, while the euro, a recent proxy for risk appetite, erased early gains as caution set in folling Friday's release of European banks' stress test results. [.N] [FRX/]
"I think we'll probably see the equity risk sentiment correlation moving around a bit," said Sacha Tihanyi, currency strategist at Scotia Capital.
"The futures market in the U.S. is kind of oscillating between gains and losses, not showing us too strong a direction. Europe is kind of mixed so I think it's just a yet-to-be decided kind of sentiment day."
Looking to the new home sales, due at 10 a.m. (1400 GMT), economists in a Reuters survey forecast a total of 320,000 annualized units in June compared with 300,000 in May.
"It's always going to be a driver particularly of late when we've seen some weakness in the U.S. data and worries about the home sales market ... perhaps just something in the positive territory will be reasonably constructive for risk," added Tihanyi.
The next big data events will be domestic and U.S. GDP on Friday.
At 8:10 a.m. (1210 GMT), the Canadian currency CAD=D4 was at C$1.0360 to the U.S. dollar, or 96.53 U.S. cents, up from Friday's close at C$1.0361 to the U.S. dollar, or 96.52 U.S. cents.
In the short term, key levels to test were seen at C$1.0330 and C$1.0440.
Canadian bond prices edged slightly lower as U.S. Treasuries inched higher and outperformed benchmark euro zone debt as investors looked past European bank stress tests and focused on the gloomy economic picture. [US/]
The two-year bond CA2YT=RR was 1 Canadian cent lower to yield 1.592 percent, while the 10-year bond CA10YT=RR was down 3 Canadian cents to yield 3.231 percent. (Reporting by Claire Sibonney; Editing by Theodore d'Afflisio)