• Bullish oil prices continue to underpin Loonie and kept exerting downward pressure.
• The USD attracts some fresh buying at lower levels and helped bounce off daily lows.
• Traders look forward to the latest US consumer inflation figures for some fresh impetus.
The USD/CAD pair remained under some selling pressure for the second straight session, albeit has managed to trim a part of its early losses to sub-1.3200 level, or one-week lows.
After repeated failures to preserve/build on the momentum further beyond the 1.3300 handle, a combination of factors prompted some long-unwinding trade in the previous session and the retracement slide extended through the Asian session on Wednesday.
A strong rebound in crude oil prices turned out to be a factor that underpinned the commodity-linked currency- Loonie, which coupled with a modest USD pull-back from multi-week tops exerted some downward pressure through Tuesday’s trading session.
Oil prices remained supported by Tuesday's OPEC monthly report, showing that output in January fell by 800,000 bpd to 30.81 million bpd, albeit was partly offset by renewed US Dollar buying that helped the pair to rebound around 30-pips from daily lows.
It would now be interesting to see if the pair is able to build on the recovery move or meets with some fresh supply at higher levels as the focus now shifts to the US economic docket, highlighting the release of the latest US consumer inflation figures later during the early North-American session.
Technical levels to watch
Any subsequent recovery now seems to confront immediate resistance near the 1.3265 level, above which the pair is likely to make a fresh attempt to reclaim, rather build on the momentum beyond the 1.3300 round figure mark.
On the flip side, the 1.3200-1.3195 region now becomes immediate support to defend, which if broken now seems to accelerate the ongoing slide back towards the very important 200-day SMA support near the 1.3135 region.
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