USD/CAD keeps the red below 1.35 handle

The USD/CAD pair extended Friday's disappointing US jobs data-led reversal move from two-week tops and slipped farther below the key 1.35 psychological mark.

The pair remained under some selling pressure for the second consecutive day and touched a 3-day low near 1.3465 region. A modest recovery in oil prices, with WTI crude oil spiking to $48.50 in reaction to geopolitical tension in the Middle East, extended support to the commodity-linked currency - Loonie, and weighed on the major.

However, with oil prices surrendering majority of its early gains led by a coordinated move to snap diplomatic and commercial ties with Qatar, recovering US treasury bond yields, which underpinned the US Dollar demand, helped limit further losses.

   •  WTI retreats from tops, back near $48.00

It now remains to be seen if the pair is able to recover back above the 1.35 handle or remains under some selling pressure amid firming expectations for an eventual Fed rate-hike action at the next FOMC meeting on June 13-14.

Today's US economic docket features the release of revised nonfarm productivity, ISM non-manufacturing PMI and factory orders data, which would be looked upon to grab some short-term momentum play.

Technical levels to watch

Recovery back above the 1.35 handle, leading to a subsequent move beyond 1.3515 level, now seems to boost the pair back towards mid-1.3500s intermediate resistance before eventually lifting it further towards its next major hurdle near the 1.3600 handle.

On the flip side, sustained weakness below 1.3450 immediate support now seems to negate prospects of any near-term recovery and turn the pair vulnerable to head back towards testing the 1.3400 handle en-route over one-month lows support near 1.3385 region (May 25 low).