USD/CAD Price Analysis: Rangebound near 1.3450 ahead of Canadian Employment data

• USD/CAD trades sideways near 1.3450 ahead of Canada’s labor market data.
• Deepening Middle East tensions continue to provide support to the US Dollar.
• A lackluster action in the Loonie asset indicates indecisiveness among market participants.

The USD/CAD pair oscillates in a tight range around 1.3450 as investors await the Canadian Employment data for January, which will be published at 13:30 GMT.

Investors anticipate Canadian employers recruiting 15K new workers against flat demand in December. The Unemployment Rate is expected to increase slightly to 5.9% vs. the prior reading of 5.8%. The Bank of Canada (BoC) may focus on keeping interest rates at their current level longer if the labor market conditions remain upbeat.

Meanwhile, the US Dollar Index (DXY) attempts to recover as market mood remains cautious due to deepening Middle East tensions. Israel denies the ceasefire proposal from Hamas having unacceptable terms. Also, investors await January's United States inflation data, which will be published on Tuesday. Investors see price pressures expanding at a steady pace.

USD/CAD turns sideways in a range of 1.3450-1.3500 after correction from an 11-week high of 1.3544 on an hourly scale. The Loonie asset struggles for a direction ahead of crucial labor market data. The 50-period Exponential Moving Average (EMA) around 1.3460 has overlapped the Loonie asset, indicating a sharp contraction in volatility.

The 14-period Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, indicating a sideways trend.

The fresh upside would emerge if the Loonie asset climbed above the January 17 high at 1.3542, which will drive the asset towards the round-level resistance of 1.3600, followed by the November 30 high at 1.3627.

On the flip side, a sell-off could appear if the Loonie asset drops below January 31 low at 1.3359. This will expose the asset to January 4 low at 1.3318 and January 5 low at 1.3288.

USD/CAD hourly chart