USD/CAD struggles to move back above 1.3300 mark, US CPI in focus

The ongoing slump in Oil prices undermine Loonie and lend some support.
The USD remains on the defensive amid firming Fed rate cut expectations.
Traders now eye Wednesday’s US consumer inflation data for a fresh impetus.

Haresh Menghani FXStreet

The USD/CAD pair held on to its mildly positive tone through the early European session on Wednesday, albeit remained capped below the previous session's swing high.

After a rather subdued action through the major part of Tuesday's trading session, the pair witnessed a surprise move to the upside and was being supported by weaker Crude Oil prices. A weaker demand outlook, coupled with an unexpected rise in the US inventories weighed on Oil and undermined demand for the commodity-linked currency - Loonie.

The positive move, however, lacked any strong bullish conviction and failed to sustain above the 1.3300 handle in the wake of the US President Donald Trump's efforts to talk down the domestic currency. Trump said that other currencies are undervalued against the US Dollar and also complained that the Fed was keeping interest rates way too high.

The comments further reaffirmed market expectations for an eventual Fed rate cut action by the end of this year and kept the USD bulls on the defensive, failing to assist the pair to build on the positive momentum despite a follow-through slump in Oil prices on Wednesday. Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term or positioning for any further appreciating move.

Later during the early North-American session, the US economic docket - highlighting the release of the latest consumer inflation figures, will now be looked upon to grab some meaningful trading opportunities. In the meantime, the USD/Oil price dynamics might continue to act as key determinants of the pair's momentum on Wednesday.

Technical levels to watch

USD/CAD

Overview
Today last price	1.3286
Today Daily Change	0.0002
Today Daily Change %	0.02
Today daily open	1.3284

Trends
Daily SMA20	1.3422
Daily SMA50	1.3413
Daily SMA100	1.3348
Daily SMA200	1.3278

Levels
Previous Daily High	1.3309
Previous Daily Low	1.325
Previous Weekly High	1.3529
Previous Weekly Low	1.3262
Previous Monthly High	1.3566
Previous Monthly Low	1.3357
Daily Fibonacci 38.2%	1.3287
Daily Fibonacci 61.8%	1.3273
Daily Pivot Point S1	1.3253
Daily Pivot Point S2	1.3222
Daily Pivot Point S3	1.3195
Daily Pivot Point R1	1.3312
Daily Pivot Point R2	1.334
Daily Pivot Point R3	1.3371

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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