USD/CAD recovers early lost ground to 1-week lows, refreshes session tops ahead of US CPI

   •  Renewed USD buying interest helped reverse an early dip to sub-1.3200 level.
   •  Bullish oil prices continue to underpin Loonie and seemed to cap further gains.
   •  Focus remains glued to the upcoming release of US consumer inflation figures.

The USD/CAD pair built on its steady intraday ascent and is currently placed at the top end of its daily trading range, around the 1.3240-45 region.

After yesterday's modest profit-taking slide, the US Dollar regained some positive traction and was seen as one of the key factors behind the pair's intraday turnaround from sub-1.3200 level, or one-week lows.

The greenback found some support growing optimism over a possible US-China trade deal and the overnight news that the US lawmakers have reached a tentative budget deal to avert another partial government shutdown.

The pair has now recovered around 50-pips from daily lows, albeit the prevalent positive mood around crude oil prices continued underpinning the commodity-linked Loonie and kept a lid on any strong follow-through.

The upward bias around the black gold remained intact after top exporter Saudi Arabia said it would cut crude exports and deliver an even deeper cut to its production and amid rising concerns over supply disruption led by the US sanctions on Venezuela.

Moreover, investors also seemed reluctant to place any aggressive bets ahead of today's key release of the latest US consumer inflation figures. Hence, it would be prudent to wait for a strong follow-through before positioning for any further intraday appreciating move.

Technical levels to watch

Immediate resistance is pegged near the 1.3265-70 region, above which the pair is likely to aim towards decisively breaking through the 1.3300-1.330 supply zone. On the flip side, the 1.3200-1.3195 region now becomes immediate support to defend, which if broken might accelerate the fall back towards challenging the very important 200-day SMA support near the 1.3240-35 region.

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