USD/CAD dribbles around 1.3400 despite dovish BoC Macklem, mixed Fed talks and dicey Oil price

• USD/CAD holds lower ground while defending the previous day’s reversal from 13-day high.
• US Dollar remains indecisive even as yields retreat, pays little heed to US President Biden’s SOTU amid mixed Fedspeak.
• BoC’s Macklem hints at a pause in rate hikes but failed to impress pair buyers.
• Risk catalysts could entertain Loonie traders ahead of Friday’s key jobs report from Canada.

USD/CAD makes rounds to 1.3400 as bulls and bears jostle during early Wednesday morning in Europe. In doing so, the Loonie pair fails to justify dovish comments from Bank of Canada (BoC) Governor Tiff Macklem, as well as the mildly offered Oil price. Even so, the US Dollar’s failure to rebound enables the quote to remain mildly offered by the press time.

BoC Governor Macklem teases a pause in the rate hike trajectory by asking for time to gauge how households and businesses adapt to higher rates before further moves. The policymaker also said, “Rate hikes have hit homeowners hard.”

On the other hand, Federal Reserve Chairman Jerome Powell said, “Expect 2023 to be a year of significant declines in inflation,” while also adding that if data were to continue to come in stronger than expected, would certainly raise rates more. It’s worth observing that Fed’s Powell showed hesitance in praising the latest jump in the US Nonfarm Payrolls (NFP) during the appearance on Tuesday when asked about the job growth being a likely force behind the Fed's aggressive rate hikes. The same suggests a pause in the Fed rate after currently priced-in two rate hikes worth 0.25%.

Elsewhere, US President Biden delivered his State of the Union (SOTU) speech in the first joint session of Congress since Republicans took control of the House of Representatives in January. During the SOTU, US President Biden showed readiness to work with them for the betterment of America. The policymaker also pushed for the billionaire minimum tax while trying to show a tough stand on China if the dragon nation undermines the US sovereignty.

Furthermore, WTI crude oil snaps a two-day rebound near $77.50 amid dicey markets and mixed concerns surrounding future energy demand. In doing so, the black gold fails to cheer a surprise draw in the private inventory data per the American Petroleum Institute’s (API) Weekly Crude Oil Stock data.

Against this backdrop, the US Dollar Index (DXY) remains sluggish near 103.30, after reversing from a one-month high the previous day. In doing so, the greenback’s gauge versus the six major currencies traces softer US Treasury bond yields while justifying unimpressive comments from US President Joe Biden and Federal Reserve (Fed) officials.

It’s worth noting that the S&P 500 Futures print mild losses near 4,170 while paring the biggest daily jump in nearly a week whereas the US 10-year Treasury bond yields snap a three-day uptrend while retreating from a one-month high of around 3.68% to 3.65% by the press time.

Moving ahead, a light calendar keeps challenging USD/CAD moves ahead of the key Canada monthly employment report, up for publishing on Friday.

Technical analysis

Multiple failures to provide a daily closing beyond the 50-bar Exponential Moving Average (EMA), around 1.3445 by the press time, directs USD/CAD toward the 200-day EMA support of 1.3265.