USD/CAD sidelined near 1.3430, US CPI on sight

The upside momentum in the greenback is taking a breather on Thursday, prompting USD/CAD to trade in the red around the 1.3430 area.

USD/CAD attention to data, Fedspeak

The recent rebound in crude oil prices has lent support to CAD and thus prompted spot to recede from multi-month highs just below the 1.3600 handle (Monday).

In fact, the barrel of West Texas Intermediate has managed to advance beyond the $46.00 mark yesterday after dropping to 3-month lows near $42.00 at the beginning of the week.

In addition, the US dollar is shedding some ground after climbing to fresh YTD tops above 100.50 on Wednesday, always backed by mounting bets on a Fed move by end of 2016.

Later in the NA session, the focus should remain on USD, as inflation figures tracked by the CPI, Housing Starts, Building Permits, the Philly Fed index and Initial Claims area all due.

In addition, New York Fed W.Dudley (permanent voter, neutral), L.Brainard (permanent voter, dovish) and Chicago Fed C.Evans (2017 voter, dovish) are all due to speak ahead of the testimony by Chair J.Yellen on ‘The Economic Outlook’ before the Joint Economic Committee of Congress.

USD/CAD significant levels

As of writing the pair is losing 0.07% at 1.3437 and a break below 1.3401 (low Nov.15) would aim for 1.3311 (38.2% Fibo of the 2016 drop) and then 1.3260 (low Nov.9). On the upside, the initial hurdle aligns at 1.3575 (50% Fibo of the 2016 drop) followed by 1.3590 (high Nov.14) and finally 1.3839 (61.8% Fibo of the 2016 drop).