Amidst a sharp recovery move witnessed in WTI crude oil, the USD/CAD dropped to 1.3340 region erasing most of its daily gains. However, the selling pressure quickly faded away as WTI's upside appeared to lack momentum.
The USD/CAD is having a difficult time finding direction as the US Dollar Index remains in a tight range just above the important 100 psychological level. Furthermore, Canadian data was ignored by the participants despite an increase in wholesale sales from 0.7% to 3.3% in January.
Mixed signals from FOMC members weren't able to help the pair find direction either. While Philly Fed's Patrick Harker, a hawkish voter, said today that the recent rate hike was in line with data and argued that an extra hike could be possible, Neal Kashkari (voter, dovish), President of the Minneapolis Fed, argued that inflation expectations remain very well anchored and that there is not a threat of high inflation in the very near term.
At the moment the pair is up 0.05% at 1.3350 facing the first resistance at 1.3370 (20-DMA). Next hurdles are aligned at 1.3400 (psychological level/10-DMA) and 1.3480 (Mar. 15 high). On the downside, a break below 1.3300 (daily low/psychological level) could open the door to 1.3215 (200-DMA/50-DMA) and 1.3160 (Feb. 28 low).