USD/CAD holds red near 3-week lows after Canadian CPI/US data, FOMC minutes in focus

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  • The USD/CAD pair is finding some fresh supply on Wednesday amid rising oil prices.
  • The stronger-than-expected Canadian CPI provided an additional boost to the Canadian dollar.
  • The mixed US macro data failed to impress the bulls ahead of the FOMC Minutes.

The USD/CAD pair maintained supply near session lows, around the 1.3225-20 region, or near three-week lows, and moved little after economic data from the US and Canada.

After failing to capitalize on the previous day's positive move to near week tops, the pair met with some fresh supply on Wednesday and lost some additional ground after the release of stronger-than-expected Canadian consumer inflation figures.

Headline CPI rose 0.3% in January compared to 0.2% expected and pushed the annual rate to 2.4% versus a rise to 2.3% expected. Meanwhile, the Bank of Canada's core CPI came in line with market expectations and came in at 1.8% y/y for the mentioned month.

On the back of a nice positive intraday move in crude oil prices, the upbeat domestic data provided an additional boost to the commodity-linked currency - the Canadian dollar - and forced the pair to challenge the very important 200-day SMA support.

On the other hand, the US dollar held steady near multi-month highs, and the business lacked any solid follow-up amid a mixed performance from US Treasury yields. Upbeat US economic data on Wednesday also did little to convince the bulls or provide any support for the major currency pair.

However, it remains to be seen if the current decline represents a bearish breakout in the near term or can attract some buying at lower levels as investors begin to position and position the next major risk which is the release of the FOMC Minutes.

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