The USD/CAD forecast points northward as investor sentiment tilts towards caution, with all eyes on a pivotal US inflation report scheduled later in the week. Moreover, traders adjusted their expectations for the number and size of Fed cuts this year. Consequently, there was a rebound in US Treasury yields, which gave more support to the dollar. The upcoming US inflation reading on Thursday could further influence views on Fed rate cuts. Current market pricing indicates a 64% chance that the Fed might initiate rate cuts as early as March, compared to nearly 90% a week ago, according to the CME FedWatch Tool. Meanwhile, Friday’s data showed stronger-than-expected US employment and wage growth in December, signaling a resilient labor market. However, a separate survey on the same day revealed a significant slowdown in the US services sector last month. Notably, employment figures hit a nearly three and a half year low. On Friday, the Canadian dollar showed little change against the US dollar after a mixed job report from the US and Canada.Canada’s economy added only 100 jobs in December. Still, wages for permanent employees increased at the fastest pace in three years. As a result, money markets lean towards April for the first Bank of Canada rate cut. Furthermore, a Reuters poll suggests that if the Fed shifts to rate cuts before the Bank of Canada, the Canadian dollar will trade stronger than anticipated throughout the year. USD/CAD key events todayIt will be a quiet session for USD/CAD as neither the US nor Canada will release high-impact economic reports.USD/CAD technical forecast: Bullish momentum falters near 1.3350USD/CAD 4-hour chart The USD/CAD bullish move has weakened near the 1.3350 key level. Notably, the price is not swinging too far from the 30-SMA, showing buyers are weak. At the same time, although the price is moving higher, the RSI is descending, indicating a bearish divergence.If buyers regain momentum, the price will likely bounce off the 30-SMA to retest the 1.3501 resistance level. On the other hand, if the divergence plays out, there will be a shift in sentiment as the price will break below 1.3350 and the 30-SMA. Consequently, the price might drop to the 1.3200 support level.More By This Author:Gold Price Turns Bullish As FOMC Minutes Weigh On GreenbackUSD/CAD Price Analysis: CAD Slips On Weak Factory ActivityGold Price Retraces To Demand Zone As Dollar Probes Recovery