USDCAD| Bearish sentiment awaiting the CPI!

The USD/CAD pair is facing selling pressure for the second consecutive day, moving away from a near four-week high around the 1.3415 region, reached on Tuesday. Currently, spot prices are hovering around the 1.3365-1.3360 area, down just over 0.10% for the day. Traders are now awaiting the latest US consumer inflation figures for further momentum. The upcoming US CPI report is set to influence the Federal Reserve's (Fed) future policy decisions, subsequently impacting the demand for US dollars (USD) and providing a new direction for the USD/CAD pair. Amidst the anticipation of key US data, the dollar continues its consolidative price movement, confined within a one-week trading range due to uncertainty about when the US central bank will start reducing interest rates. Meanwhile, an increase in Crude Oil prices is supporting the commodity-linked Loonie, adding to the selling pressure on the USD/CAD pair. However, any significant rise in oil prices seems elusive due to the bearish fundamental backdrop. The EIA report on Wednesday revealed an unexpected weekly build in US inventories, heightening concerns that global oil consumption will slow in 2024. Additionally, diminishing prospects for a more aggressive policy easing by the Fed, which supports high US Treasury bond yields, favor USD bulls and help limit losses for the USD/CAD pair. Therefore, I expect a drop to the 1.3232 area with a long rebound around 1.35. Wishing everyone good trading, greetings from Nicola.