USD/CAD struggles near multi-month lows, just above 1.3400 mark

• A combination of factors failed to assist USD/CAD to register any meaningful recovery.
• The USD struggled to capitalize on the previous session’s upbeat NFP report-led bounce.
• A pickup in oil prices underpinned the loonie and further collaborated to cap the pair.

The USD/CAD pair struggled to register any meaningful recovery and remained well within the striking distance of three-month lows.

The pair showed some resilience below the 1.3400 round-figure mark and staged a modest intraday bounce of around 45 pips on the first day of a new trading week. However, a combination of factors kept a lid on the USD/CAD pair's attempted recovery move.

The US dollar failed to capitalize on the previous session’s goodish rebound and capped the upside for the USD/CAD pair. As investors looked past Friday's upbeat US monthly jobs report, the prevalent upbeat market mood continued undermining the safe-haven USD.

The global risk sentiment – as depicted by a positive sentiment around the equity markets – remained supported by growing optimism over a sharp V-shaped global economic recovery and expectations that the worst of the coronavirus pandemic was over.

Apart from a subdued USD price action, some follow-through pickup in crude oil prices benefitted the commodity-linked currency – the loonie – and further contributed towards keeping a lid on any strong recovery for the USD/CAD pair.

Oil prices climbed to hit their highest since March 6 on Monday after OPEC+ agreed to extend the deal to withdraw almost 10% of global supplies until end-July. The uptick was further supported by data showing that China's crude imports hit an all-time high in May.

Meanwhile, oversold conditions on short-term charts now seemed to hold investors from placing aggressive bearish bets. This, in turn, seemed to be the only factor helping limit deeper losses for the USD/CAD pair, at least for the time being.

Technical levels to watch