- WTI recovers above $56 on Wednesday.
- US Dollar Index clings to small gains above 97.
- US CPI data come in line with expectations.
The USD/CAD pair failed to push above 1.3250 area on Wednesday and gave back a small portion of its recent gains as the commodity-sensitive loonie received some demand on the back of the recovery attempt seen in crude oil. At the moment, the pair is down 0.08% on the day at 1.3230.
After falling for 12 straight days amid rising supply and the dismal demand outlook, the barrel of West Texas Intermediate staged a rebound today and was last seen trading at $56.25, adding 1.8% on a daily basis. However, it’s still unclear if the weekly reports released by the API later and today and by the EIA tomorrow will allow a deeper correction and the loonie might stay vulnerable.
On the other hand, the greenback struggles to preserve its bullish momentum as markets stay focused on Brexit headlines and doesn’t allow the pair to gain traction. Today’s data from the U.S. showed that the inflation measured by the CPI rose to 2.5% on a yearly basis in October from 2.3% in September to match analysts’ forecasts. Furthermore, the core-CPI edged down to 2.1%. Nonetheless, the market reaction to these numbers was muted and the US Dollar Index was last seen up 0.15% on the day at 97.12.
Technical levels to consider
The initial resistance for the pair aligns at 1.3250 (daily high) ahead of 1.3290 (Jul. 19 high) and 1.3335 (Jun. 21 low). On the downside, supports could be seen at 1.3135 (20-DMA), 1.3045 (100-DMA) and 1.2990 (200-DMA).
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