The USDCAD pair can’t take advantage of a small rise during the day and falls again on Wednesday. During the first part of the European day, the pair stayed low and is now close to the 100-day SMA support, which is around 1.3230. This is a nearly two-month low.

When global risk sentiment goes up again, more people sell the safe-haven US Dollar, which makes USDCAD go down. At first, it looked like Ukraine may have fired the missile that hit Poland on Tuesday at a Russian missile that was coming their way. The dollar falls when people think the Fed might change its “hawkish” stance.

The commodity-based Loonie and the USDCAD pair are both helped by a rise in crude oil prices. Lower fuel usage in China due to growing COVID-19 instances could hurt the black liquid. This should keep USDCAD losses to a minimum before the next readings on Canadian consumer inflation and US Retail Sales for the month.

Near the 100-day SMA, the USDCAD pair has been stable from a technical point of view. Before getting ready for more losses, wait to see if the selling continues below the overnight swing low, which is around 1.3225. Any rebound could stall around 1.3300 and 1.3335. If it were to be cleared, it could start a short-covering surge.

Conclusion

If inflation numbers were higher than expected, the market would expect interest rates to go up, which would make USDCAD go down for a short time.