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USD/CAD Faces Downward Pressure Amid Rising Crude Oil Prices and

USD/CAD Faces Downward Pressure Amid Rising Crude Oil Prices and Anticipation of OPEC Decision

The USD/CAD pair is retracing recent gains, trading lower around 1.3710 during the Asian session on Tuesday. The Canadian Dollar (CAD) is gaining strength against the US Dollar (USD), supported by the surge in Crude Oil prices.

Western Texas Intermediate (WTI) is hovering around $77.50 per barrel, with market speculation suggesting that the Organization of the Petroleum Exporting Countries (OPEC) might consider further production cuts during its meeting scheduled for November 26. The prospect of reduced oil output is bolstering the Canadian Dollar.

Investor focus is also on Canada's Consumer Price Index (CPI) data set to be released today. Forecasts indicate a year-on-year inflation rate for October of 3.2%, a decline from the previous reading of 3.8%. A dip in inflation could provide the Bank of Canada (BoC) with flexibility to maintain its current overnight rate target at 5.0%, as the central bank has signaled that rate decisions will hinge on economic indicators.

The US Dollar (USD) is facing headwinds as improved risk appetite prevails, driven by expectations of a dovish stance from the Federal Reserve (Fed). With the USD encountering challenges, technical analysis suggests the potential for a new bullish impulse in the USD/CAD pair. The rejection of the 61.8% Fibonacci level from the previous major swing. Traders are monitoring these technical cues for potential trading opportunities as the session unfolds.