USD/CAD rejects from 1.2870 on subdued DXY, oil skids, Fed minutes hog the limelight

The USD/CAD pair has witnessed a rejection after attempting an upside break of the consolidation formed in a narrow range of 1.2846-1.2865 in the Tokyo session. The asset is facing barricades on higher levels as the US dollar index (DXY) is displaying a subdued performance in the Asian session.

The DXY displayed wild moves at the open after an extra-long weekend as on Monday US markets were closed on account of Independence Day. Therefore, a wide gyration by an asset after a long weekend cannot be ruled out as investors trim their positions vigorously.

Investors are keeping an eye on the release of the Federal Open Market Committee (FOMC) minutes on Wednesday. This will provide a detailed view of the 75 basis points (bps) rate hike announcement by the Federal Reserve (Fed) in June.

This week, the release of the labor market data from the US and Canada on Friday carries significant importance. A preliminary estimate for the job additions by the US economy in its labor market is 270k, much lower than the former release of 390k. While, the Canadian administration may have generated 22.5k, lower than the prior release of 39.8k.

Meanwhile, the oil prices have corrected after failing to kiss the psychological resistance of $110.00. Investors should not mix the minor correction with a bearish reversal as the latter needs more filters. On a broader note, the market participants are weighing the supply disruption as the OPEC cartel is unable to meet the reduced demand due to their production limiting capacity.