USD/CAD consolidating in a range around mid-1.3400s

The USD/CAD pair held weaker at the start of a new trading week and inched back closer to over two-week lows touched on Friday.

The pair on Friday came under some fresh selling pressure after stronger-than-expected employment data from Canada, showing strong signs of a turnaround in the Canadian economy. 

The latest round of weakness on Monday could be attributed to a mildly offered tone surrounding the US Dollar, despite of a pick-up in the US treasury bond yields. Adding to this, a modest recovery in oil prices, with WTI crude oil moving back above $46.00/barrel mark, further extended support to the commodity-linked currency - Loonie, and collaborated to the offered tone surrounding the major.

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Moving ahead, there are no major market moving economic releases due from the US or Canada and hence, broader market sentiment surrounding the greenback and oil price-dynamics would continue to act as key determinants of the pair's movement on Monday.

Investors, however, would wait for passage of this week's important US macro releases and the much awaited FOMC decision before determining the pair's near-term trajectory. 

Technical levels to watch

Currently hovering around mid-1.3400s, any recovery attempts might continue to confront strong resistance near the 1.35 handle ahead of 1.3535-40 region, above which a fresh bout of short-covering has the potential to continue boosting the pair further towards its next major hurdle near the 1.36 mark.

On the downside, a follow through weakness below 1.3420 immediate support now seems to accelerate the slide back towards 1.3385 support (May 25 low) before the pair eventually drops to an important support 1.3330-25 region.