USD/CAD recovers early lost ground to near 3-week lows, but lacks follow-through

   •  An intraday pullback in oil prices weigh on Loonie and helped recover early lost ground.
   •  The uptick lacked any strong bullish conviction amid the prevalent USD selling bias.

The USD/CAD pair rallied over 40-pips during the early North-American session and refreshed session tops, around the 1.3330 region in the last hour.

A sudden pullback in crude oil prices weighed on the commodity-linked currency - Loonie and turned out to be one of the key factors that helped the pair to recover early lows ground to an intraday low level of 1.3284, or near three-week lows.

WTI crude oil started losing positive momentum, rather witnessed some profit-taking after Russian President Vladimir Putin said that Russia is against an uncontrollable increase of oil prices and is ready to sit down for talks with OPEC+ in H2 if needed.

Adding to this, the US President Donald Trump's latest threat to slap tariffs on European goods further dampened investors' appetite for riskier assets, which was evident from a slump in equities and also collaborated to a weaker tone surrounding oil markets.

The recovery move, however, lacked any strong conviction and remained capped amid the prevalent US Dollar selling bias, which remained on the defensive in wake of a sharp intraday slide in the US Treasury bond yields amid the prevalent risk-off mood.

Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term or positioning for any further near-term recovery move ahead of Wednesday's important releases - the latest US consumer inflation figures and FOMC meeting minutes.

Technical levels to watch