USD/CAD inching back closer to Friday’s 2-week lows

The USD/CAD pair maintained its offered tone through mid-European session and is currently placed a session lows near 1.3435-30 region.

Spot remained under selling pressure at the start of a new trading week and the latest leg of downslide on Monday could be attributed to a strong recovery in oil prices. In fat, WTI crude oil is now trading with strong gains of over 1.5%, above mid-$46.00s and underpinned demand for the commodity-linked currency - Loonie, eventually is weighing on the major.

Adding to this, a softer tone surrounding the US Dollar further collaborated to the pair's depreciating move back closer to over two-week lows touched in the aftermath of stronger-than-expected Canadian jobs data on Friday. 

The pair, however, has held within Friday's trading range amid a modest pick-up in the US treasury bond yields, suggesting that market participants seemed convinced for an eventual Fed rate-hike action on Wednesday. Hence, investors focus would remain glued to Wednesday's FOMC decision, along with this week's other important US macro releases, in order to determine the pair's next leg of directional move. 

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Technical levels to watch

On a sustained weakness below 1.3425-20 area, the pair is likely to break through the 1.3400 handle and head towards retesting May 25 lows support near 1.3385 region before eventually heading towards its next major support near 1.3330-25 region.

Meanwhile on the upside, sustained recovery beyond session top resistance near 1.3460-65 region is likely to trigger a short-covering bounce back towards the key 1.35 psychological mark before the pair make a fresh attempt to clear an important horizontal resistance near 1.3535-40 region.