USD/CAD holds marginally above 1.35 mark, Canadian jobs data in focus

The USD/CAD pair surrendered majority of its early gains and has now retreated back closer to the key 1.35 psychological mark. 

The pair's pull-back from 1.3535-40 immediate resistance area could be attributed to a modest recovery in oil prices, with WTI crude oil bouncing back to $46.00/barrel mark and extending some support to the commodity-linked currency - Loonie.

With Comey's testimony doing little to warrant any serious action against the US President Donald Trump, strong bullish sentiment surrounding the US Dollar helped the pair to hold with marginal gains just above the 1.35 handle, at least for the time being.

Overnight the pair had a muted reaction to BoC’s half-yearly Financial System Review and neutral tone from the BoC Governor Poloz and consolidated within a narrow trading range to end the day relatively unchanged.   

Moving ahead, investors now turn their attention to the Canadian employment report, due later during the NA session, which should bring in some volatility for the major. 

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From technical perspective, the pair has been facing fresh supply just ahead of mid-1.3500s and hence, a slight weaker report would help the pair to break through this immediate strong hurdle. 

Technical levels to watch

On a convincing break through mid-1.3500s, the pair is likely to dart towards reclaiming the 1.3600 handle, above which a fresh bout of short-covering might continue boosting it further towards its next hurdle near 1.3640-45 horizontal zone. 

Meanwhile on the downside, sustained weakness below 1.3485 immediate support is likely to accelerate the slide back towards mid-1.3400s before the pair eventually breaks below weekly lows support near 1.3425 level and head back towards retesting the 1.3400 handle.