• USD/CAD meets with some intraday selling in reaction to the stellar Canadian jobs report.
• The mixed US NFP data fails to impress the USD bulls or provide any meaningful impetus.
• The price-action warrants caution for bullish traders and positioning for additional gains.

The USD/CAD pair surrenders a major part of its intraday gains and retreats below the 1.2600 mark during the early North American session.

The Canadian Dollar gets a strong boost in reaction to the upbeat domestic employment details, which, in turn, prompts some selling around the USD/CAD pair. In fact, Statistics Canada reported that the
economy added 104K new jobs in December, beating estimates for a reading of 8K by a huge margin. Adding to this, the unemployment rate unexpectedly ticked down to 5.0% during the reported month from 5.1% recorded in November.

That said, a softer tone around crude oil prices acts as a headwind for the commodity-linked Loonie. This, along with the intraday bullish sentiment surrounding the US Dollar, assists the USD/CAD pair to stick to its modest gains for the second successive day. The USD bulls, meanwhile, seem rather unimpressed by the upbeat US jobs data, which showed that the economy added 223K new jobs in December as compared to the 200K estimated.

Furthermore, the jobless rate edged down to 3.5%, beating estimates for a reading of 3.7%. That said, softer Average Hourly Earnings data overshadows the upbeat report, which, along with a sharp spike in the US equity futures, acts as as headwind for the safe-haven greenback. This, in turn, warrants some caution before placing aggressive bullish bets around the USD/CAD pair and positioning for an extension of the overnight bounce from the 100-day SMA.

Technical levels to watch