USD/CAD hits fresh monthly lows, below mid-1.2400s

The greenback held weaker against its Canadian counterpart, with the USD/CAD pair extending its slide farther below the key 1.25 psychological mark to hit fresh monthly lows during early NA session.

Against the backdrop of Friday's disappointment from the Fed Chair Janet Yellen's speech at the Jackson Hole Symposium, concerns over economic impact by a Tropical Storm Harvey continued denting the already weaker sentiment surrounding the US Dollar and dragged the major for the fourth consecutive session.

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The pair was also being weighed down by a modest rebound in oil prices, which tends to benefit the commodity-linked currency - Loonie. In fact, WTI crude oil has managed to bounce off session lows and has been one of the key factors responsible for the pair's sharp slide of 25-pips over the past hour or so. 

On the economic data front, a larger-than-expected rise in the US goods trade balance and wholesale inventories data did little to lend any support to the greenback and stall the pair's near-term downward trajectory.

With today's fall, the pair has now dropped over 300-pips from the vicinity of 1.2800 handle touched on August 15 and remains within striking distance of multi-month lows posted late July. 

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Technical levels to watch

A follow through weakness below 1.2440-35 area is likely to accelerate the fall towards the 1.2400 handle before the pair eventually drops to test its next support near mid-1.2300s.

On the upside, any recovery move back above 1.2475 level now seems to confront fresh supply near the 1.25 handle, above which a bout of short-covering could lift the pair towards 1.2555-60 intermediate resistance ahead of the 1.2600 handle.