USD/CAD reverses part of Friday’s tepid recovery gains

The USD/CAD pair came under some renewed selling pressure on Monday and eroded part of Friday's modest recovery gains from fresh 28-month lows.

On Friday, the pair bottomed out near 1.2060 level and recovered over 100-pips from the lowest level since early May 2015. The recovery move was supported by a sharp decline in crude oil prices, which tends to dent demand for the commodity-linked currency - Loonie. 

With oil prices regaining some fresh traction on Monday, the pair turned back lower and was being weighed down by Friday's upbeat Canadian employment details, which underpinned the Canadian Dollar and helped negate a broad based US Dollar recovery. 

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Later during the NA session, Canadian housing starts data is unlikely to provide any fresh impetus with oil price dynamics acting as an exclusive driver of the pair's movement through Monday's trading session.

Technical levels to watch

Immediate support is pegged near the 1.2100 handle, below which the pair is likely to head back towards Friday's swing lows support near the 1.2060 region before eventually dropping to the key 1.20 psychological mark.

On the flip side, the 1.2165-70 region now seems to act as immediate hurdle, above which a bout of short-covering could assist the pair to reclaim the 1.2200 handle and test 1.2230-35 resistance.