- USD/CAD in bullish consolidation amid a rebound in the US dollar.
- Rising oil prices limit the upside in Loonie, as risk appetite returns.
- Focus remains on the Canadian jobs data, Fed Monetary Policy Report.
USD/CAD is on a gradual decline towards 1.2500, having failed to sustain the upside above 1.2550, as the focus shifts towards the Canadian labor market report for the next direction in prices.
Despite the upside attempts earlier in the Asian session above 1.2550, the pair remains in a narrow range, extending the consolidative mode following a correction from three-month tops of 1.2591.
The renewed buying interest seen in WTI prices amid a return of risk appetite help put a floor under the CAD’s downside, capping the advances in USD/CAD.
On the others side, the risk recovery lifts the US Treasury yields and, in turn, the dollar, keeping the downside cushioned in the major.
Therefore, the currency pair remains locked between familiar levels heading into the Canadian jobs data.
The North American economy is expected to have added massive 195,000 jobs last month when compared to huge losses of 68,000 and 207,100 jobs seen in May and April respectively. The Unemployment Rate is seen falling sharply to 7.7% in June vs. May’s 8.2%.
Read: Canadian Jobs Preview: USD/CAD set to fall amid summer hiring boom?
How to trade USD/CAD on jobs report?
Encouraging Canada’s labor market data could come to the rescue of the CAD, triggering a correction in the currency pair towards the immediate horizontal trendline support aligned at 1.2485. On the other, downbeat jobs data combined with persisting dollar’s strength could put the 200-DMA resistance back in play. A sustained break above the latter is needed to open up doors towards 1.2700.