USD/CAD remains confined in a range around mid-1.2400s

• USD/CAD struggled for a firm direction and oscillated in a range on Monday.
• Bullish oil prices underpinned the loonie and capped the upside for the pair.
• A combination of factors extended some support to the USD and the major.

The USD/CAD pair remained confined in a narrow trading band through the Asian session and was last ween hovering in the neutral territory, around mid-1.2400s.

A combination of factors failed to provide any meaningful impetus to the USD/CAD pair, instead led to a subdued/range-bound price action on the first day of a new week. Crude oil prices built on Friday's goodish bounce from near one-month lows and edged higher for the second successive day. This, in turn, underpinned the commodity-linked loonie and acted as a headwind for the major.

On the other hand, the Fed's dovish outlook kept the US dollar bulls on the defensive and further collaborated to keep a lid on any meaningful upside for the USD/CAD pair. It is worth recalling that the US central bank stuck to its transitory inflation narrative last Wednesday, while Fed Chair Jerome Powell reiterated that policymakers were in no rush to hike borrowing costs.

That said, a solid rebound in the US Treasury bond yields, along with Friday's upbeat US monthly jobs report and a softer rise tone, helped limit losses for the safe-haven greenback. This, in turn, warrants some caution for bearish traders and before positioning for any meaningful corrective slide for the USD/CAD pair from the 1.2480 region, or near one-month tops touched on Friday.

There isn't any major market-moving economic data due for release on Monday, leaving the USD at the mercy of the US bond yields and the broader market risk sentiment. Apart from this, oil price dynamics might provide some impetus to the USD/CAD pair. Traders will further take cues from Fed Chair Jerome Powell's remarks at an online conference later during the US session.

Technical levels to watch