USD/CAD keeps the red despite softer Canadian CPI, surging oil prices continue to weigh

   •  A modest USD rebound helped ease the prevalent bearish pressure.
   •  Softer than expected Canadian CPI figures provides an additional boost.
   •  Surging oil prices underpinned Loonie and capped any further up-move.

The USD/CAD pair maintained its offered tone through the early North-American session, albeit managed to recover few pips post-Canadian CPI figures.

The pair managed to find some support near the 1.3130 region amid a modest US Dollar rebound from three-week lows and got an additional boost from softer than expected Canadian consumer inflation figures. 

Data released on Wednesday showed Canadian headline CPI recorded a modest m/m rise of 0.1% in January, with the yearly rate and BoC's core CPI decelerating sharply to 1.4% y/y and 1.5% y/y respectively.

The pair did tick higher in reaction to the data, albeit a strong follow-through upsurge in crude oil prices, now up over 2% for the day, continued underpinning the commodity-linked - Loonie and kept a lid on any meaningful recovery. 

It would now be interesting to see if the pair is able to attract any strong follow-through buying or resumes with its prior depreciating move as the focus now shifts to the Fed Chair Jerome Powell's second appearance before the Congress.

Technical levels to watch

USD/CAD