USD/CAD battles 1.3600 as bears stay in control ahead of BOC

• USD/CAD is consolidating the downside ahead of the BOC expected 75 bps hike.
• Upbeat Asian markets take the wind out of the USD recovery, WTI trades listlessly.
• The pair looks to test the 1.3565 support after the rising wedge breakdown.

USD/CAD is trading on the defensive while keeping its range around the 1.3600 level, as the US dollar recovery fizzles out amid a strong advance in Asian equities. Investors shrug off the drop in the S&P 500 futures, led by the downbeat earnings reports of Microsoft and Alphabets after the US markets close.

The lackluster performance in the WTI price is also doing little to help the loonie extend its previous rally, as the US oil remains confined around the $84.50 mark. The major also remains weighed down by weaker US Treasury yields amid fading hopes of the Fed continuing its aggressive rate hike track amid slowing economic activity in America.

All eyes now turn towards the Bank of Canada (BOC) rate hike decision, with a 75 bps rate increase fully baked in after another beat in the Canadian inflation data. However, economists are expecting the central bank to shift towards a dovish pivot, in the face of growing recession risks. With inflation still hot, the BOC could stick to its pledge of the need for further rate increases until inflation is brought down.