USD/CAD clings to gains around 1.3350

• The USD/CAD bounces from the weekly low reached this Friday, although it has no continuity.
• A rally in US bond yields revives demand for the dollar and offers some support for the pair.
• A good rally in Oil prices underpins the Loonie and keeps significant recovery limited.

The pair USD/CAD attracts some buying near the 1.3315-1.3320 zone and posts a modest recovery from the fresh weekly low reached this Friday. The pair is holding on to gains around the 1.3350 zone during the early part of the North American session and appears to have snapped a three-day losing streak for now, though it lacks bullish conviction.

A modest rally in US Treasury yields helps the dollar gain some positive traction on the final day of the week, which, in turn, is seen offering some support for the USD/CAD pair. . That said, the growing acceptance that the Fed will slow the pace of its tightening is preventing dollar bulls from making aggressive bets and limiting currency gains.

It should be recalled that the minutes of the November Federal Open Market Committee (FOMC) meeting, released on Wednesday, revealed that officials were largely satisfied that they could stop pre-empting rate hikes. This, in turn, bolsters bets for a relatively minor rate hike of 50 basis points at the next FOMC policy meeting in December. Aside from this, a generally positive risk tone is keeping the dollar at bay, which is a safe haven.

Additionally, a good rally in Crude Oil prices underpins the commodity-linked Loonie and acts as a headwind for the USD/CAD pair amid relatively light trade volumes. In the absence of any major economic releases on the market in both the US and Canada, the fundamental background warrants some caution before positioning for any further positive intraday moves.

Technical levels to watch