USD/CAD trades in red near 1.3270 ahead of US data

• Crude oil recovery loses steam, WTI trades around $51.
• US Dollar Index consolidates weekly gains near 98.30.
• Coming up on Friday: Jobs data from US and Canada.

The USD/CAD pair tested the 1.33 handle more than a few times since the start of the week but failed to make a daily close above that level. With the trading action turning subdued ahead of Friday's key macroeconomic data releases, the pair is posting small daily losses near the 1.3270 handle.

After closing the day 3.5% higher on Wednesday, the barrel of West Texas Intermediate (WTI) extended its recovery and rose above $52 before losing its traction.

According to the latest headlines, which seem to be weighing on crude oil prices, the OPEC+ Joint Technical Committee (JTC) will recommend an output cut of 600,000 barrels per day following its three-day meeting. At the moment, the WTI is down 0.3% on the day at $51, making it difficult for the commodity-sensitive loonie to stay resilient against the USD.

Eyes on employment data

In the second half of the day, Nonfarm Productivity and Unit Labor Costs from the US will be looked upon for fresh impetus. Ahead of these data, the US Dollar Index is registering small daily gains near the 98.30 mark. More importantly, investors will be paying close attention to the US Nonfarm Payrolls (NFP) report and the Canadian Unemployment data on Friday.

“The Canadian labour market is expected to begin 2020 on a subdued note, with employment forecast to rise by 10k in January on the heels of a (downwardly revised) 27k increase for December," said TD Securities analysts previewing the Canadian data. "Even though the Bank's Business Outlook Survey showed solid hiring intentions in Q4, the balance of opinion for small businesses has started to deteriorate."

Technical levels to watch for