USD/CAD climbs to 50-DMA as oil turns lower ahead of US CPI data

As crude oil retraces from 2016 highs, the USD/CAD pair recovers from day's through and climbed to a session high level of 1.2945 ahead of the US CPI print and data from the US housing market.

With a high degree of correlation between crude oil prices and the Canadian Dollar, the USD/CAD pair extended its rebound from 1.2837 day's through level move back close to 50-day SMA immediate strong resistance.

Moreover, with the slated release of US CPI data in a short while from now, an upbeat inflation number could further depress dollar-denominated commodities, like crude, and eventually lift the USD/CAD pair higher.

The USD/CAD bulls would be aiming to sustain strength above 50-day SMA in order to increase the prospects of a near-term short-covering rally.

Technical levels to watch

On a sustained strength above 1.2950-60 zone, the pair seems all set to reclaim 1.3000 psychological mark, above which the pair might continue with its near-term recovery trend towards its next major resistance near 1.3145-50 region.

Alternatively, reversal from 50-day SMA resistance and a subsequent drop back below 1.2900-1.2890 round figure area might now drag the pair, even below day's through support near 1.2835-30 area and below 1.2800 round figure mark, towards retesting 1.2780-75 horizontal support.