USD/CAD faces barricades around 1.2950 ahead of Fed Powell, oil prices correct mildly

• USD/CAD is sensing offers around 1.2950 as investors await a speech from Fed chair Jerome Powell.
• Oil prices are mildly offered after hitting a high of $118.00, an upside bias is still intact.
• The odds of a higher Canada CPI will restrict the loonie bulls.

The USD/CAD pair has witnessed a minor selling pressure around 1.2950 and has slipped a little lower for now.  On a broader note, the greenback bulls are facing barricades in a range of 1.2974-1.2995 from the last three trading sessions.

Despite a broad-based weak performance by the greenback bulls in the last two trading sessions after the Federal Reserve (Fed) announced a rate hike by 75 basis points (bps), the asset has failed to display any meaningful downside move like the other risk-sensitive assets. One could state that the loonie bulls are also weak and have remained vulnerable. A vulnerable performance by the loonie bulls could bank upon higher expectations for Canada Consumer Price Index (CPI), which is due next week.

On an annual basis, Canada's inflation is seen at 7.5%, and a significant jump is expected against the prior print of 6.8%. While the core CPI that excludes oil and food prices is expected to land at 5.9% vs. 5.7% recorded earlier.

The oil prices are mildly offered after hitting a critical hurdle of $118.00. A bumper rate hike announcement by the Federal Reserve (Fed) has triggered recession fears which kept the oil prices on the tenterhooks.

Meanwhile, the US dollar index (DXY) is expected to remain on the sidelines as investors are awaiting the speech from Fed chair Jerome Powell. The speech may guide investors above the likely monetary policy action going further along with the rationale behind announcing the 75 bps rate hike.