USD/CAD off lows, still in red below 1.2800 handle

   •  Persistent USD weakness prompts some fresh selling at the start of a new week.
   •  Pickup in the US bond yields offset bullish oil prices and helps limit downside.

The USD/CAD pair extended its steady decline through the early NA session and refreshed daily lows in the last hour, albeit quickly recovered few pips thereafter.

The pair struggled to build on Friday's disappointing Canadian jobs data-led recovery bounce from 3-week lows and faced rejection near the 1.2800 handle. The ongoing US Dollar profit-taking slide was seen as one of the key factors prompting some fresh selling at the start of a new trading week.

This coupled with a sharp spike in crude oil prices, following the release of bullish OPEC monthly oil market report, further underpinned the commodity-linked currency - Loonie and exerted some additional downward pressure on the major.

However, a goodish pickup in the US Treasury bond yields, which although failed to revive the USD demand, helped limit further downside and helped the pair to bounce off lows. Currently trading around the 1.2770 region, the pair seems more likely to remain confined in a narrow range amid empty economic docket. 

Technical levels to watch

A follow-through weakness below mid-1.2700s has the potential to continue dragging the pair further towards testing 100-day SMA support near the 1.2685 region. On the upside, the 1.2800 handle might continue to act as an immediate hurdle, above which the pair could attempt a move towards 50-day SMA, support-turned-resistance, currently near the 1.2830 region.