USD/CAD retakes 1.3100 mark and beyond ahead of US CPI and BOC

The USD/CAD pair's recovery momentum has taken the pair back above the very important 200-day SMA. 

The US Dollar accelerated its recovery momentum during early NA session and has been the sole driver of the pair's recovery move beyond 1.3100 handle. Moreover, traders also seemed inclined to cover their bearish positions ahead of today's key event risks.

Meanwhile, a sharp reversal in crude oil prices, with WTI crude oil now trading with a loss of around 1.75%, is also weighing on the commodity-linked currency - Loonie, and collaborating to the pair's strong bounce from the vicinity of 1.3000 important psychological mark support. 

Today's US economic docket features the release of US CPI and industrial production data and few Fedspeaks, including the Fed Chair Janet Yellen, later during NY session. From Canada, BOC monetary policy decision will grab all the market attention and might provide some fresh impetus for the pair's next leg of directional move.

Technical levels to watch

A follow through buying interest above 1.3120 level is likely to trigger a short-covering rally towards 1.3175-80 resistance area before the pair eventually reclaims 1.3200 handle and head towards testing its next resistance near 1.3215-20 region.

On the downside, sustained weakness back below 1.3100 handle (200-day SMA) is likely to find some support near 1.3070-65 region below which the pair is likely to aim back towards testing 1.3000 psychological mark.