USD/CAD consolidates in a narrow range above 1.3340 amid the risk-off, US data eyed

• USD/CAD oscillates in a narrow range near 1.3345, down 0.03% for the day.
• ADP showed that the US economy created 324K jobs in July, above the estimation.
• A decrease in oil prices has undermined the Loonie.
• The key events to monitor are the Canadian Employment Change and Nonfarm Payrolls.

The USD/CAD pair consolidates its recent gains around 1.3345 during the early Asian session on Thursday. The major pair is on track for its sixth weekly close above 1.3200. Lower Oil prices are the main driver of the Canadian Dollar’s depreciation.

On Wednesday, Automatic Data Processing Inc. (ADP) revealed that the number of employed people in the US private sector rose by 324K, above estimates of 189K and lower than the revised reading of 455,000 in June. This figure is above the 12-month average. The employment data could convince the Federal Reserve (Fed) to hike additional rates this year, which benefits the US Dollar and acts as a tailwind for the USD/CAD pair. 

On the Canadian Dollar front, investors await the Canadian Employment Change on Friday as it could offer hints into the strength of domestic activity and the direction of the BoC’s monetary policy.

Earlier this week, Canada’s manufacturing sector declined for the third consecutive month in July. The S&P Global Canada Manufacturing PMI rose to 49.6. This figure followed the previous month’s 48.8 and was better than expected at 48.9. A reading below 50 indicates sector contraction. It has been below that level since May. Meanwhile, a decrease in oil prices has undermined the Loonie since Canada is the largest oil exporter to the United States.

Market participants will keep an eye on the US weekly Jobless Claims, Unit Labour Costs and ISM Service PMI later in the American session. On Friday, attention will shift to Canadian Employment Change and Nonfarm payrolls. The US economy is expected to have created 180,000 jobs. While economists forecast that the Canadian economy will create 21,100 jobs in July. The data will be critical for determining a clear movement for the USD/CAD pair.

Technically, the further upside appears favorable for USD/CAD as the Relative Strength Index (RSI) stands above 50 on the one-hour chart. The immediate resistance level is seen at 1.3385 (High of June 6) and the initial support level appears at 1.3300 (a psychological round mark).