USD/CAD sits near session tops, just below mid-1.3700s post-US CPI

• USD/CAD rallies over 50 pips from the daily swing lows amid weaker oil prices.
• The uptick seemed unaffected by some renewed selling bias around the USD.
• Slightly higher-than-expected US CPI failed to provide any meaningful impetus.

The USD/CAD pair reversed a mid-European session dip to the 1.3685-80 region and moved back to the top end of its daily trading range post-US inflation figures.

Some renewed weakness in crude oil prices undermined demand for the commodity-linked currency – the loonie – and turned out to be one of the key factors behind the pair's goodish intraday bounce of over 50 pips.

On the other hand, the US dollar witnessed some renewed selling amid fading optimism over the US President Donald Trump's proposed economic stimulus package and failed to provide any additional boost to the pair.

Moreover, concerns over the economic impact of the coronavirus outbreak continued denting demand for riskier assets and led to a fresh leg down in the US Treasury bond yields, which added to the USD selling bias.

Meanwhile, the USD bulls seemed rather unimpressed by the latest US consumer inflation figures, which showed that the headline CPI edged lower to 2.3% YoY rate as compared to 2.2% expected and 2.5% previous.

Hence, it will be prudent to wait for some strong follow-through buying before positioning for any further near-term appreciating move as the focus now shifts to the US annual budget for the fiscal year 2021.

Technical levels to watch