USD/CAD climbs above 1.3600, capitalizes on US Dollar’s recovery in a data-packed week

• USD/CAD moves above 1.3600 following the footprints of the US Dollar.
• Oil prices continue to face pressure above $80.00 as the Chinese economy is going through turbulent times.
• As per expectations, the Canadian economy grew at a slower pace of 0.3% vs. Q1 growth rate of 0.8%.

The USD/CAD pair jumped strongly above the round-level resistance of 1.3600 in the early New York session. Strength in the loonie asset is backed by a strong recovery in the US Dollar as market sentiment turns bearish ahead of the United States labor market data for August.

S&P500 is expected to open on a flat note amid a quiet market mood. However, investors will remain cautious ahead of the US Automatic Data Processing (ADP) Employment data for August. The US Dollar Index (DXY) jumps to near 104.30 as investors hope that higher-than-anticipated labor market data could elevate hopes of one more interest rate hike from the Federal Reserve (Fed).

As per the estimates, the US labor force witnessed fresh additions of 195K, lower than July’s reading of 324K. A higher employment reading would allow the Fed to deliver a hawkish commentary in the September monetary policy meeting.

But before the US Employment data, investors will focus on JOLTS Job openings for July. BLS noted that the number of job openings on the last business day of July is forecast to decline to 9.46 million from 9.58 million in June. "Over the month, the number of hires and total separations decreased to 5.9 million and 5.6 million, respectively,

Meanwhile, oil prices continue to face pressure above $80.00 as the Chinese economy is going through turbulent times due to rising deflation risks and weak domestic demand. It is worth noting that Canada is the leading exporter of oil to the United States and lower oil prices will impact the Canadian Dollar.

On the economic data front, the Canadian Dollar will dance to the tune of the Q2 Gross Domestic Product (GDP) data for the April-June quarter. As per expectations, the Canadian economy grew at a slower pace of 0.3% vs. Q1 growth rate of 0.8%.