USD/CAD recovers towards 1.2700 amid firmer USD, ahead of key data

• USD/CAD is rising back towards 1.2700 after Tuesday’s steep correction.
• Risk-off mood-led USD strength buoys the spot, as WTI bulls take a breather.
• Focus remains on the US data dump and FOMC minutes for fresh direction.

Having found strong bids near 1.2660, USD/CAD is heading back towards 1.2700, tracking the gains in the US dollar across the board.

The greenback holds onto the recent advances, as the risk sentiment remains sour amid increased anxiety over the Fed’s rate hike outlook, which will be hinted at Wednesday’s FOMC minutes.

Also, a raft of crucial US data, including the Durable Goods, PCE inflation and GDP, will provide fresh signs on the economic recovery, which could ad to the Fed rate hike speculations.

Meanwhile, a pause in the WTI price rally also offers comfort to USD/CAD bulls. The US oil consolidates its two-day recovery rally to $78.79 levels, as traders were disappointed by a smaller-than-expected oil release from the US Strategic Petroleum Reserve (SPR).

Looking forward, the sentiment around oil prices and the US dollar will drive the USD/CAD price action ahead of the key US economic releases.

USD/CAD: Technical levels to watch out