USD/CAD faces fragile barricades around 1.3300 ahead of US/Canada labor market report

• USD/CAD has sensed selling pressure around 1.3300 as the focus shifts to labor market data.
• Contrary to the sell-off in the USD Index, 10-year US Treasury yields have jumped to near 3.96%.
• As per the estimates, the labor market added fresh 20K employees in June vs. a lay-off of 17.3K payrolls.

The USD/CAD pair has sensed delicate barricades near the round-level resistance of 1.3300 in the early London session. The Loonie asset is expected to remain on tenterhooks as investors have shifted their focus toward the release of the United States and Canada’s Employment data.

S&P500 futures have faced selling pressure in early Europe, portraying bearish market sentiment ahead of corporate earnings. The US Dollar Index (DXY) has dropped sharply to near 103.17 despite an interest rate hike by the Federal Reserve (Fed) in its July monetary policy meeting is widely anticipated.

Contrary to the sell-off in the USD Index, 10-year US Treasury yields have jumped to near 3.96%. As per the CME Fedwatch tool, more than 88% chances are in favor of a 25 basis point (bp) interest rate hike to 5.25-5.50%.

Going forward, investors will focus on the United States Employment data. The US Automatic Data Processing (ADP) Employment Change report is expected to show fresh additions of 228K in June vs. the former addition of 278K.

On the Canadian Dollar front, investors will also await labor market data, which will release on Friday at 12:30 GMT. As per the estimates, the labor market added fresh 20K employees in June vs. a lay-off of 17.3K payrolls. The Unemployment Rate is expected to increase to 5.3% against the 5.2% released last month. Apart from payroll figures, investors will focus on the Average Hourly Earnings data.

Meanwhile, oil prices are facing marginal pressure around $72.00, however, more upside is still favored as the impact of production cuts announcement by Saudi has not faded yet.

It is worth noting that Canada is the leading exporter of oil to the United States and higher oil prices would support the Canadian Dollar.