USD/CAD flirting with 1.3500 mark, Canadian CPI and Fedspeaks in focus

Having posted a session peak near 1.3565 region, the USD/CAD pair reversed all of its gains and dipped back below 1.3500 psychological mark before retracing few pips.

Currently hovering around 1.3500 handle, a sharp recovery in crude oil prices is benefiting the commodity-linked currency - Loonie and dragging the major lower. WTI crude oil prices managed to recover around $1.0 from daily low level near mid-$44.00s and is building on to its recovery momentum. 

Adding to this, a fresh wave of US Dollar profit taking, following its recent up-surge to the highest level in nearly 14-years, is exerting additional selling pressure around the major. Following the outcome of US presidential elections, markets have been pricing-in aggressive fiscal spending by Trump administration, which might lead to inflationary pressure in the US economy. This coupled with growing consensus of an eventual December Fed rate-hike has been driving the greenback higher in the past couple of week. 

Focus now shifts to Canadian consumer inflation data, slated for release during early NA session and is expected to tick higher in October. The monthly print is anticipated to come-in at 0.2%, up from September's 0.1%, while yearly reading is expected to have risen to 1.5% from 1.3% recorded in the previous month. 

Later during NY trading session, speeches by New York Fed President William Dudley and Kansas City Fed President Esther George would provide fresh impetus for the greenback and eventually drive the major during US trading session.

Technical levels to watch

A follow through selling pressure is likely to drag the pair further towards 1.3465 support below which the slide could get extended towards weekly lows support near 1.3400 handle. On the upside, 1.3525 level now becomes immediate resistance and is followed by a strong resistance near 1.3560-65 area (session peak), which if conquered would open room for further near-term appreciating move for the pair.

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