USD/CAD turns neutral post-Canadian CPI, FOMC next

   •  Canadian CPI fell 0.4% m/m in Nov; yearly rate eases more than expected.
   •  Negative prints offset by the prevalent USD selling bias/modest oil rebound.
   •  Focus remains on the highly anticipated FOMC monetary policy update.

The USD/CAD pair managed to recover a major part of its early downtick and is currently placed in neutral territory, around mid-1.3400s post-Canadian inflation figures.

According to the data released this Wednesday, Canadian headline CPI fell 0.4% m/m in November and the yearly rate eased more than expected to 1.7% as compared to 2.4% y/y rate in the previous month. The data exerted some downward pressure on the Canadian Dollar, though the prevalent bearish tone surrounding the US Dollar partly offset the downbeat readings.

This coupled with a mildly positive tone around crude oil prices further underpinned the commodity-linked - Loonie and kept a lid on any meaningful up-move. Moreover, traders also seemed reluctant to place any aggressive bets ahead of today's key event risk - the highly anticipated FOMC monetary policy decision, due to be announced later during the US trading session.

Technical levels to watch