USD/CAD consolidates in a range above mid-1.3600s as traders keenly await US NFP

• USD/CAD fails to lure buyers and remains confined to over a one-month-old range.
• Rising Fed rate cut bets continue to weigh on the USD and cap gains for the major.
• Traders also seem reluctant to place aggressive directional bets ahead of the US NFP.

The USD/CAD pair shows resilience below the 200-hour Simple Moving Average (SMA), albeit seems to struggle to attract any meaningful buyers during the Asian session on Friday. Spot prices currently trade with a mild positive bias, around the 1.3670 area, as traders keenly await the release of the US monthly employment details before placing fresh directional bets.

The popularly known Nonfarm Payrolls (NFP) report is expected to show that the US economy added 185K jobs in May as compared to 175K previous and the unemployment rate held steady at 3.9%. This, along with Average Hourly Earnings, would influence the inflation trajectory and the Fed's future policy decision, which, in turn, will drive the US Dollar (USD) demand and provide a fresh directional impetus to the USD/CAD pair.

Heading into the key data risk, market participants have been pricing in a greater chance that the Federal Reserve (Fed) will start cutting interest rates cut in September in the wake of signs of a slowdown in the US economy. This, in turn, keeps the US Treasury bond yields and the USD depressed. Apart from this, this week's goodish rebound in Crude Oil prices is seen underpinning the commodity-linked Loonie and capping the USD/CAD pair. 

Meanwhile, the Bank of Canada (BoC) lowered its benchmark rate for the first time in four years, from a more than two-decade high and signaled concern about slowing economic growth. The central bank also acknowledged improvement in the underlying inflation, fueling speculations about another rate reduction next month. This could cap the upside for the Canadian Dollar (CAD) and act as a tailwind for the USD/CAD pair. 

The aforementioned mixed fundamental backdrop further warrants some caution for aggressive traders, suggesting that the USD/CAD pair is more likely to extend its range-bound price action on the last day of the week. Nevertheless, spot prices remain on track to register modest weekly gains, though remain in a familiar range held since early May.