USD/CAD up little, but remains capped at mid-1.2400s

   •  Fails to capitalize on broad-based USD strength.
   •  BOC rate hike prospects/bullish oil prices capping gains.

The USD/CAD pair extended its steady recovery move from Friday's over 3-month lows and traded with a mild positive bias for the second consecutive session.

The pair seems to have found a decent support near the 1.2400 handle but failed to capitalize on a strong follow-through US Dollar buying interest and continued with its struggle to clear its immediate hurdle, near mid-1.2400s. 

Against the backdrop of growing bets over additional Fed rate hike moves in 2018, a goodish pickup in the US Treasury bond yields remained supportive of the post-NFP strong USD rebound but did little to assist the pair to register any meaningful recovery. 

The prevailing bullish run-up in crude oil prices underpinned the commodity-linked currency - Loonie, which coupled with a supportive case for BOC to raise interest rates next week was also seen keeping a lid on the pair's recovery move. 

It would now be interesting to see if the pair is able to build on its modest uptick or remains capped amid virtually empty economic docket, featuring the second-tier release of US JOLTS job opening and Canadian housing starts data. 

Technical levels to watch

A clear breakthrough mid-1.2400s is likely to accelerate the recovery move towards the key 1.2500 psychological mark en-route 1.2530-35 supply zone. On the flip side, the 1.2400-1.2380 region might continue to protect the immediate downside and is followed by Friday's swing lows support near 1.2355 area.