Ella 
Heading into Wednesday’s European session, USD/CAD bulls took a break near their highest level since early June. The currency pair struggled with multiple conflicting catalysts, with the major US dollar retracing and WTI crude oil prices falling, while the market sentiment was cautious ahead of today’s FOMC meeting minutes.
It is worth pointing out that strong Canadian CPI data the day before yesterday failed to boost CAD bulls due to risk aversion and strong US retail sales data. Additionally, hawkish comments from Minneapolis Fed President Neel Kashkari also added to the pair’s bullish bias.
That said, WTI crude was down 0.5% at $80.25 by press time, as fears of reduced demand from China, one of the world’s largest oil customers, pushed the energy bear market above a one-week low set the previous day.
On the other hand, the dollar is hovering around 103.20, testing a five-month-old descending resistance line at a one-month high. The dollar posted its first loss in five days against six major currencies.
Elsewhere, benchmark U.S. 10-year Treasury yields retreated from yearly highs and U.S. stock futures paused losses, while Asian shares were mixed, reflecting cautious optimism in the market, which in turn challenged USD/CAD traders.
Looking ahead, Canadian housing starts in July and wholesale sales in June, as well as U.S. industrial output in July, will provide short-term boosts. The main focus, however, will be on the Fed minutes, as market participants expect the end of the rate hike cycle, which, if confirmed, would drag the pair back from multi-day highs.
