USD/CAD consolidates gains above the 1.3350 mark ahead of Canadian, US employment data

• USD/CAD holds above the 1.3350 mark ahead of top-tier employment data from the US and Canada.
• US Initial Jobless Claims rose to 227K last week, as expected; the ISM Service PMI (Jul) fell to 52.7 from 53.9 prior.
• Market participants will watch the Canadian Employment Change, US Nonfarm Payrolls.

The USD/CAD pair consolidates its recent gains heading into the early European session on Friday. The major currently trades near 1.3355, gaining 0.02% for the day. Market players await employment data from the US and Canada for fresh impetus.

Data released from the US on Thursday showed mixed readings. That said, the US Initial Jobless Claims increased to 227,000 for the week ended July 29, matching expectations. At the same time, the ISM Service PMI for July dropped to 52.7 from 53.9 prior and was worse than expected at 53. Additionally, Unit Labor Costs from Q2 increased to 1.6%, lower than the 2.6% expected. Investors will take more cues from US wage inflation and US employment data later in the day. The upbeat 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, the S&P Global Canada Manufacturing PMI rose to 49.6 versus 48.8 prior and was better than expected at 48.9. Meanwhile, the rebound in oil prices has underpinned the Loonie since Canada is the largest oil exporter to the United States.

Moving on, market participants will keep an eye on the Canadian Employment Change and Nonfarm Payrolls. The US economy is expected to have created 180,000 jobs in July. While economists forecast that the Canadian economy will create 21,100 jobs. The data will be critical for determining a clear movement for the USD/CAD pair.

According to the one-hour chart, the further upside appears favorable for USD/CAD as the Relative Strength Index (RSI) stands in the bullish territory above 50. The immediate resistance level is seen at 1.3378 (High of August 3), and the initial support level appears at 1.3328 (Low of August 3), followed by 1.3300 (a psychological round mark).