USD/CAD keeps the red near 3-week lows post-Canadian CPI/US data, FOMC minutes in focus

• USD/CAD meets with some fresh supply on Wednesday amid rising oil prices.
• Hotter-than-expected Canadian CPI provided an additional boost to the Loonie.
• Mixed US macro data failed to impress bulls ahead of FOMC meeting minutes.

The USD/CAD pair maintained its offered tone near session lows, around the 1.3225-20 region, or near three-week lows, and moved little post-US/Canadian macro data

Having failed to capitalize on the previous session's intraday positive move to near one-week tops, the pair met with some fresh supply on Wednesday and lost some additional ground following the release of hotter-than-expected Canadian consumer inflation figures.

The headline CPI rose 0.3% in January as compared to 0.2% expected and pushed the yearly rate to 2.4% vs. an uptick to 2.3% expected. Meanwhile, the BoC's core CPI came matched market expectations and came in at 1.8% YoY rate for the reported month.

Against the backdrop of a goodish intraday positive move in crude oil prices, upbeat domestic data provided an additional boost to the commodity-linked currency – the loonie – 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 tops, albeit lacked any strong follow-through amid a mixed performance by the US Treasury bond yields. Wednesday's upbeat US economic releases also
did little to impress bulls or lend any support to the major.

It, however, remains to be seen if the current downfall marks a near-term bearish breakdown or can attract some buying at lower levels as investors start positioning for the next key event risk – the release of the latest FOMC meeting minutes.

Technical levels to watch