USD/CAD up little, remains capped below 1.3700 handle ahead of data

The USD/CAD pair once again failed ahead of the 1.3700 handle and reversed majority of its daily gains, albeit has managed to hold its neck above mid-1.3600s.

A modest greenback pull-back seems to be the only factor that could be attributed to the pair's retracement from session tops. In fact, the key US Dollar Index has now retreated back below the 99.00 handle and has failed to assist the pair to build on early momentum and move past the 1.3700 handle. 

However, the positive tone surrounding the US treasury bond yields, in wake of an agreement on the US spending bill and growing expectations for additional Fed rate-hike moves, was seen limiting further downslide. 

Moreover, the prevalent bearish sentiment surrounding oil markets, with WTI crude oil sliding further towards the $49.00/barrel mark, further weighed on the commodity-linked currency - Loonie, and lending support to the major. 

Looking at the broader picture, the dominant bullish trend remains firmly in place as investors now look forward to this week's key event risks - Wednesday's FOMC monetary policy decision and the keenly watched monthly jobs report (NFP) on Friday.

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Next in focus would be the US Treasury Secretary Steven Mnuchin's speech, due in a short while from now. On the economic data front, the Core PCE Price Index, Personal Income/Spending data and ISM Manufacturing PMI are due for release, along side Canadian Manufacturing PMI are due for release later during the NA session.

Technical levels to watch

Immediate support is pegged near 1.3635 level, below which the pair is likely to accelerate the slide even below the 1.3600 handle towards its next support near 1.3570 area. On the upside, the 1.3700 handle remains immediate strong barrier, which if cleared decisively should continue boosting the pair towards 1.3735 level (Feb. 25, 2016 high) en-route the 1.3800 handle.