USD/CAD pulls away from two-month highs, looks to close week below 1.3450

After spending the first half of the day in a tight range above 1.3450, the USD/CAD pair lost its traction in the NA session and dropped to a daily low of 1.3390 before going into a consolidation phase. As of writing, the pair was trading at 1.3425, erasing 0.2% on a daily basis.  

Statistics Canada today reported that the number of employed in Canada increased by 56,000 in February to surpass the market expectation for no change to provide a much-needed boost to the loonie that lost nearly 200 pips against the dollar this week. Moreover, the unemployment rate remained unchanged at 5.8%. 

On the other hand, the disappointing employment figures from the U.S. hurt the greenback and caused the US Dollar Index to extend its corrective slide from the 2019 high set yesterday at 97.71. "The headline nonfarm payroll number at +20K surprised sharply to the downside even as the blow-out January print was revised higher (to +311K)," TD Securities analysts noted in a recently published report. "Weather distortions may be part of that story. Otherwise, the unemployment rate came back down to 3.8% as household job growth was strong."

Meanwhile, crude oil struggled to push higher after closing the previous day in the positive territory and the barrel of West Texas Intermediate slumped to its lowest level in three weeks at $54.50 to make it difficult for the commodity-related CAD to preserve its bullish momentum.

Technical levels to consider

The pair face the initial resistance at 1.3465 (Mar. 8 low) ahead of 1.3500 (psychological level) and 1.3530 (Dec. 20 high). On the downside, supports could be seen at 1.3390 (daily low), 1.3310 (Mar. 5 low) and 1.3250 (50-DMA).