• USD/CAD steadies at 11-week high amid market’s cautious mood ahead of week’s top-tier event.
• Firmer Canada inflation, upbeat US Retail Sales and WTI crude oil’s downbeat performance also challenge Loonie traders.
• Fed policymakers need to defend hawkish bias to keep USD/CAD bulls on the table.
• US Industrial Production, Canada housing data act as additional checks.

USD/CAD bulls take a breather at the highest level since early June, keeping the reins around 1.3500 heading into Wednesday’s European session. In doing so, the Loonie pair struggles between the contrasting catalysts, namely the US Dollar’s retreat and the WTI crude oil’s downbeat performance, amid the cautious mood ahead of today’s Federal Open Market Committee’s (FOMC) latest Monetary Policy Meeting Minutes.

It’s worth noting that the previous day’s upbeat prints of the Canada Consumer Price Index (CPI) and the Bank of Canada (BoC) CPI failed to impress the Canadian Dollar (CAD) buyers as the risk-off mood joined strong US Retail Sales. Further, hawkish comments from Minneapolis Federal Reserve President Neel Kashkari also add strength to the bullish bias about the Loonie pair.

That said, the WTI crude oil drops half a percent to $80.25 by the press time as energy bears prod the one-week low marked the previous day amid fears of receding demand from China, one of the world’s biggest oil customers.

On the other hand, the US Dollar Index (DXY) seesaws around 103.20 while poking a five-month-old descending resistance line at the highest level in a month. In doing so, the Greenback’s gauge versus the six major currencies prints the first daily loss, so far, in five.

Additionally, a pullback in the benchmark US 10-year Treasury bond yields from the yearly high joins a pause in the downside of the US stock futures and mixed performance of the Asia-Pacific shares to portray the market’s cautious optimism, which in turn prods the USD/CAD traders.

Looking ahead, Canada Housing Starts and Wholesale Sales for July and June will precede the US Industrial Production for July to offer intermediate entertainment to the USD/CAD pair. However, major attention will be given to the Fed Minutes as market players anticipate an end of the hawkish cycle at the US central bank, which if confirmed could drag the Loonie pair from a multi-day high