USD/CAD strives to break above 1.3600 as US slowdown risks ebb

• USD/CAD aims to break above 1.3600 on upbeat US job data for September.
• Traders see the Fed reducing interest rates gradually.
• The Canadian Dollar remains under pressure despite the Oil price rising to a fresh five-week high.

The USD/CAD pair gathers strength to break above the round-level resistance of 1.3600 in Monday's European session. The Loonie asset extends its winning streak for the fourth trading session as the US Dollar (USD) gains further on expectations the Federal Reserve (Fed) will not extend its policy-easing spell with an aggressive approach.

S&P 500 futures have posted significant losses in the European session, exhibiting a dismal market sentiment. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, holds onto gains near 102.50.

Investors expect the Fed to follow a gradual rate-cut cycle as risks of an economic slowdown in the United States (US) economy have ebbed after the Employment report showed that the labor demand remained robust and wage growth was faster than projected in September.

The US economy added 254K in September after an addition of 159K job-seekers in August, according to the Nonfarm Payrolls (NFP). Annual Average Hourly Earnings grew by 4%, faster than the estimates of 3.8%.

This week, investors will pay close attention to the US Consumer Price Index (CPI) data for September, which will be published on Thursday.

Meanwhile, the Canadian Dollar (CAD) underperforms its major peers despite surging Oil prices. The Oil price jumps to a fresh five-week high due to the Israel-Iran war, which has fanned risks of a disruption in the Oil supply chain.

It is worth noting that Canada is the leading exporter of Oil to the US and higher energy prices result in an appreciation in the Canadian Dollar.