USD/CAD fades data-led gains, refreshes 3-week lows

Following a spike to the 1.36 handle at the NA session opening, the USD/CAD pair reversed course and dropped to a new three-week low at 1.3540. As of writing, the pair was trading at 1.3544, losing 60 pips, or 0.45% on the day.

Today's data from Canada revealed that the consumer inflation in April advanced to 0.4% from 0.2% in March on a monthly basis, and remained unchanged at 1.6% on a yearly basis. Both of the reading came in below the expectations and triggered a loonie sell-off, pushing the pair to its session high.

However, the effects of the dismal data quickly faded as the investors shifted their attention to dovish comments from Fed's Bullard, who implied that the Fed wouldn't need to make any more rate hikes after June. Following Bullard's statements, the US Dollar Index fell to its worst level since Trump's election victory at 97.11. At the moment, the index was at 97.17, down 0.61% on the day.

Furthermore, after rising above the significant $50 level, the barrel of West Texas Intermediate sustained its bullish momentum and recently reached its highest level since April 24 at $50.45, further supporting the commodity-linked loonie.

Technical levels to consider

The initial support for the pair aligns at 1.3500 (psychological level/50-DMA) ahead of 1.3455 (Apr. 20 low) and 1.3400 (psychological level). To the upside, resistances could be seen at 1.3600 (psychological level), 1.3665 (20-DMA) and 1.3720 (May 15 high).

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