FxWirePro: USD/CAD bulls struggles as upside momentum fades

• USD/CAD initially gained but gave up ground as investors digested  Canada's   inflation data that increased expectations that the BoC may resume its rate-cutting cycle.

•   Canada’s annual inflation eased to 2.3% in January from 2.4% in December, as a sharp drop in gasoline prices offset higher food and clothing costs. Analysts had forecast inflation to remain at 2.4%.

• Investors now assign about a 35% probability to a rate cut by the Bank of Canada this year, after the central bank has held its benchmark rate at 2.25% since October. Earlier this month, markets had been leaning toward a rate hike as the next move.

• Oil prices, one of Canada’s key export drivers, were down about 1.3% to roughly $62.11 a barrel as markets reacted to easing concerns over a conflict escalation between the United States and Iran ahead of ongoing diplomatic talks.

•  Immediate resistance is located at 1.3688(38.2%fib), any close above will push the pair towards 1.3727(Feb 6th high).

• Support is seen at 1.3592(Feb 13th low) and break below could take the pair towards 1.3499(23.6%fib).

Recommendation: Good to sell  around 1.3650 with stop loss of 1.3760 and target price of 1.3470