USD/CAD remains stalled below the 1.3700 area despite the risk-off market

• The Dollar remains buoyed near recent highs but is failing to consolidate above 1.3700.
• Strong Canadian employment figures and higher Oil prices are supporting the Loonie.
• CPI figures from the US and Canada might boost the pair's volatility on Tuesday.

The US Dollar features a moderately positive trend against its Canadian counterpart, with technical indicators on bullish ground and the risk-off mood supporting the safe-haven USD, but the pair remains unable to consolidate above the 1,3700 resistance area.

Trump has proposed 35% tariffs on Canada, in addition to 30% tariffs on the European Union and Mexico, which would build on the 50% tariffs on Canadian steel and aluminum announced earlier in June. These measures are likely to weigh on the Canadian economy unless a better deal is reached before the August 1 deadline.

Strong Canadian employment and higher Oil prices are supporting the CAD

On the other hand, data from Canada beat expectations last week, with the unemployment rate declining against expectations on the back of a sharp increase in net employment. These figures strengthen the view that the Bank of Canada will keep interest rates on hold after its July 30 meeting, which is providing some support for the loonie.

Furthermore, Cride prices, Canada's main export, have rallied about $2 from Friday's lows and are 6% above the late June lows, favoured by news that the OECC+ might be about to pause its supply hikes from October. This is another source of support for the CAD.

The economic docket is light today, and investors are likely to wait and see ahead of consumer inflation figures from both the US and Canada, which are due on Tuesday. These numbers are likely to give further clues about the monetary policies of their respective central banks and might boost USD/CAD's volatility.