USD/CAD consolidates within a 3-day old trading range, Canadian CPI awaited

Haresh Menghani FXStreet

• A modest uptick in the US bond yield/USD lends support.
• Positive crude oil prices capping additional up-move.
• Focus shifts to the key Canadian inflation data.

The USD/CAD pair reversed an early dip to 1.2715 area and rebounded over 50-pips from session lows.

A modest uptick in the US Treasury bond yields helped the US Dollar to recover part of the Asian session sell-off and provided a minor boost to the pair.

However, a goodish up-move in crude oil prices, which tends to underpin demand for the commodity-linked currency - Loonie, might continue to keep a lid on any meaningful up-move for the major.

Even from a technical perspective, the pair has been struggling to move past the 1.2785-90 supply zone. Hence, it would be prudent to wait for a decisive break through the mentioned hurdle before confirming any additional near up-move.

Today's key Canadian inflation data might act as a key catalyst in determining the pair's next leg of directional move. After missing forecasts for the past two months, a disappointing headline CPI print could exert some fresh pressure on the Canadian Dollar and pave way for resumption of the pair's prior appreciating move.

Technical levels to watch

Momentum beyond the mentioned barrier might get extended towards 1.2820 level, above which the pair is likely to dart towards reclaiming the 1.2900 handle.

On the flip side, the 1.2700 region might continue to act as immediate support, which if broken could accelerate the fall even below 1.2680-70 zone towards 1.2620 intermediate support en-route the 1.2600 handle.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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