USD/CAD manages to defend 1.21 handle for the time being

The USD/CAD pair has managed to bounce off few pips from sub-1.2100 level and is currently trading around 1.2120 region during early NA session.

The pair stalled its slide back closer to 28-month lows touched on Friday and rebounded around 20-pips from session lows despite of better-than-expected Canadian housing market data. 

According to the data released just a while ago, Canadian housing starts came-in above the 200,000 unit mark for the eighth consecutive month and rose more than expected to 223.2K in August. 

   •  Canada: Trend in housing starts was above 200K unit mark for 8th straight month

As noted by Canada Mortgage and Housing Corporation's (CMHC) chief economist, today's upbeat data was consistent with consumer confidence, which reached its highest level in ten years, but did little to provide any fresh bullish impetus to the Canadian Dollar. 

Meanwhile, a modest pull-back in crude oil prices, despite of optimistic comments from oil ministers of Saudi Arabia and the United Arab Emirates, was seen weighing on the commodity-linked currency - Loonie and has been the sole factor behind the pair's pull-back from lower levels. 

   •  Saudi, UAE OilMins: Extending global oil supply cut pact beyond March 2018 may be considered

Technical levels to watch

A follow through recovery beyond 1.2130 level could get extended back towards Friday's swing high resistance near the 1.2160-65 region, above which a bout of short-covering could help the pair to move back above the 1.2200 handle.

On the flip side, sustained weakness below the 1.2100 mark would turn the pair vulnerable to retest multi-month lows support near 1.2060 level before eventually dropping to the key 1.20 psychological mark.