Wednesday’s USD/CAD price analysis painted a bullish picture, with the dollar holding its ground in a cautious trading environment ahead of crucial US inflation data. The anticipation of these inflation figures adds an extra layer of anxiety, as they can sway the direction of Federal Reserve policy.Notably, the dollar has risen by 1% this month, recovering from a 2% drop in December, as traders reassess expectations for the timing and extent of Fed rate cuts.Meanwhile, the Canadian dollar weakened against the US dollar and reached a nearly four-week low on Tuesday. Aaron Hurd, senior portfolio manager at State Street Global Advisors, noted that the impact of monetary policy is more evident in Canada than in the US, creating a consistent backdrop favoring a weaker Canadian dollar. Moreover, the BoC has stated that a slowdown in the domestic economy signals the effectiveness of its monetary policy. Consequently, money markets anticipate an interest rate cut in April.Elsewhere, Statistics Canada reported a narrowing trade surplus to C$1.6 billion in November, down from C$3.2 billion in October. The decline in exports, led by precious metals, is the first in five months. Additionally, separate data showed a 3.9% drop in the value of Canadian building permits from October to November. USD/CAD key events todayThe pair will likely consolidate as Canada and the US will not release any major reports today. USD/CAD technical price analysis: Bulls form a shallow channel near 1.3350USD/CAD 4-hour chartOn the technical side, USD/CAD trades in a shallow, bullish channel, staying close to the 1.3350 key level. Therefore, although the bias is bullish, momentum is fading. The price is above the 30-SMA but not swinging far above it, a sign that bulls are weak. Finally, supporting the view that bullish momentum is fading is the RSI, which has made a bearish divergence.Consequently, there is a big chance the price will soon break out of the bullish channel support and the 30-SMA. Moreover, such a reversal would allow the price to break below the 1.3350 key level and retest the 1.3200 key support level.More By This Author:AUD/USD Outlook: Dollar On The Front Foot Ahead Of The US CPIGBP/USD Outlook: Investors Eye US Inflation For Policy GuidanceUSD/CAD Forecast: Dollar Gains As Market Brace For US Inflation