USD/CAD fails to build on early up-move, turns flat around mid-1.3400s

The USD/CAD pair surrendered all of its tepid recovery gains to session tops near 1.3465 region and has now dropped back to the lower end of daily trading range.

The pair's pull-back from higher levels could be attributed to a modest US Dollar retracement, backed by subdued action surrounding the US treasury bond yields. With markets already pricing-in an eventual Fed rate-hike action at its June meeting, market seems to have digested Friday's upward revision of US GDP growth numbers and now look forward to this week's important monthly jobs report from the US, NFP, for some fresh impetus.

Meanwhile, a weaker trading sentiment surrounding oil markets, which tends to dent demand for the commodity-linked currency - Loonie, has been lending some support and limiting further downslide, at least for the time being. The pair was last seen trading with minor gains around mid-1.3400s.

There are no macroeconomic data due for release as the US markets will be closed in observance of Memorial Day and hence, the USD price-dynamics would remain an exclusive driver of the pair's movement on Monday.

Technical levels to watch

On a sustained weakness back below 1.3440 level, the pair is likely to accelerate the slide towards the 1.3400 handle en-route its next support near 1.3385-80 support. On the upside, momentum beyond 1.3465 level (session peak) now seems to confront resistance near 1.3485-90 region, which if cleared might trigger a short-covering rally towards its next major hurdle near the 1.3535 region.