#USDCAD @ 1.33440 steadies after dropping the most in five weeks the previous day. (Pivot Orderbook analysis)

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• USD/CAD steadies after dropping the most in five weeks the previous day.
• Strong Canada jobs report, firmer Oil price allowed Loonie bears to sneak in.
• Hawkish Fed talks, upbeat US data challenge pair sellers ahead of the key US CPI.

The pair currently trades last at 1.33440.

The previous day high was 1.3472 while the previous day low was 1.3338. The daily 38.2% Fib levels comes at 1.3389, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3421, expected to provide resistance.

USD/CAD seesaws around the mid-1.3300s during the early hours of Monday’s Asian session, after falling the most in five weeks the previous day. In doing so, the Loonie pair portrays the market’s consolidation ahead of the key US Consumer Price Index (CPI) data amid mixed clues from the United States.

The Loonie pair dropped the most since early January on Friday after a strong Canada jobs report joined upbeat prices of WTI crude oil, Canada’s key export.

That said, WTI crude oil refreshed its monthly high to $80.48 the previous day, around the same level by the press time, amid markets chatters that Russia will cut its Oil output by 500,000 barrels in March to counter European sanctions.

Elsewhere, Canada’s Net Change in Employment grew past 15K expected and 69.2K prior (revised) to 150K for January. Further, the Unemployment Rate also reprinted 5.0% versus 5.1% expected.

The firmer Canada jobs report makes it harder for the Bank of Canada (BoC) to pause its rate hike trajectory, as signaled by the dovish comments from BoC Governor Tiff Macklem, which in turn favored USD/CAD bears.

On the other hand, the preliminary readings of the US University of Michigan (UoM) Consumer Sentiment for February rose to 66.4 versus 65.0 expected and 64.9 prior. Further, the UoM noted that the year-ahead inflation expectations rebounded to 4.2% this month, from 3.9% in January and 4.4% in December. “Long-run inflation expectations (5-year) remained at 2.9% for the third straight month and stayed within the narrow 2.9-3.1% range for 18 of the last 19 months,” Stated UoM. Further, the US Bureau of Labor Statistics announced on Friday that it revised the monthly Consumer Price Index (CPI) for December to +0.1% from -0.1%, based on updated seasonal adjustment factors.

It should be noted that the recently mixed comments from Richmond Federal Reserve (Fed) President Thomas Barkin and the US-China tussles over the ‘unidentified’ objects seem to challenge the sentiment and favor the US Dollar (USD) due to its haven appeal.

Amid these plays, S&P 500 Futures print mild losses and the US Treasury bond yields grind higher, which in turn favor the US Dollar and the USD/CAD buyers ahead of the key US inflation data.

Moving on, the USD/CAD traders should pay attention to the risk catalysts ahead of Tuesday’s US Consumer Price Index (CPI) for January, especially due to the policy pivot talks at the Fed.

Unless breaking a convergence of the three-month-old ascending trend line and a 200-day Exponential Moving Average (EMA), around 1.3270 by the press time, USD/CAD bears off the table.

Technical Levels: Supports and Resistances

USDCAD currently trading at 1.3352 at the time of writing. Pair opened at 1.3345 and is trading with a change of 0.05 % .

The pair is trading below its 20 Daily moving average @ 1.3386, below its 50 Daily moving average @ 1.3492 , below its 100 Daily moving average @ 1.3533 and above its 200 Daily moving average @ 1.3236

The previous day high was 1.3472 while the previous day low was 1.3338. The daily 38.2% Fib levels comes at 1.3389, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.3421, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.3298, 1.3251, 1.3164
• Pivot resistance is noted at 1.3432, 1.3519, 1.3566

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