USDCAD Stable Ahead of Retail Sales Data

Later today, the Canadian ADP employment change for January is due, along with the new housing price index. 

Additionally, Canadian retail sales are expected to crash for December, down to -2.1% monthly, from 0.7% in November. The ex-autos indicator is seen falling to -2% from 1.1%, likely leading to a sell-off of the CAD.

Elsewhere, oil was down 5 USD from its cycle highs, and the WTI benchmark dropped below the 90 USD threshold as chances are for a diplomatic solution in the Russia/Ukraine conflict. Since the Canadian dollar is usually tied to oil prices, it could be a bearish impetus for the CAD.

The pair remains stuck in a consolidation zone, with the support seen near 1.2650, while the resistance is at around 1.2780. Until then, the outlook remains unclear, and traders should wait for a break, either above or below the mentioned levels. 

If a bullish breakout occurs, the next target could be at the psychological level of 1.30. Alternatively, a downside break could send the pair toward 1.2560.