USD/CAD consolidates the downside around 1.3450 ahead of key data

• USD/CAD struggles with recovery along with the US dollar.
• US stimulus woes outweigh the decline in WTI.
• Canadian CPI and US data eyed amid surging virus cases.

USD/CAD trade sideways in a narrow range around 1.3450, consolidating the previous decline to seven-week lows of 1.3422.

The bulls are struggling with the recovery, reflective of the subdued price action in the US dollar against its main peers. The greenback is meandering near four-month lows of 95.05, pressured by the White House infighting on the additional stimulus and optimism over the coronavirus vaccine progress.

Although the downside remains capped, for the time being, thanks to the weakness in the US oil, which weighs negatively on the resource-linked CAD. WTI halted its rally and fell hard in the overnight trades after the American Petroleum Institute (API) showed an unexpected build in the US crude stockpiles.

Meanwhile, markets ignored the downbeat Canadian Retail Sales data released Tuesday, as the broader market sentiment remained the key driver. Therefore, a likely uptick in the Canadian Consumer Price Index (CPI), due later on Wednesday, could have little to no impact on the spot.

The focus will remain on the USD dynamics, in light of the incoming virus stats and ongoing stimulus talks.

USD/CAD technical levels

The immediate support is seen at 1.3422 (seven-week low), below which the 1.3400 level could be tested. On the flip side, the recovery will likely face stiff hurdle at 1.3473 (daily pivot point). The next resistance is aligned at 1.3513/17 (200 & 5-DMA).

USD/CAD additional levels