USD/CAD struggling near multi-month lows, around 1.24 handle

The USD/CAD pair seems to have entered a bearish consolidation phase and has been oscillating within 40-50 pips trading range around the 1.2400 handle. 

On Friday, the pair slumped to its lowest level since June 2015 in reaction to disappointing results from the latest US jobs report for August. Against the backdrop of recent strong Canadian GDP growth numbers, a late rally in crude oil prices on Friday provided an additional boost to the commodity-linked currency - Loonie and weighed heavily on the major.

The pair, however, managed to bounce off lows and was being supported by the release of closely watched US ISM manufacturing PMI, which jumped to a six-year high in August. 

A combination of diverging factors, with the US Dollar extending its weakness through early European session and a subdued action around oil markets, did little to provide any fresh impetus to the major and has led to a lackluster trading action at the start of a new trading week. 

The US and Canadian markets would remain closed on Monday, in observance of Labor Day and the consolidative price action is more likely to get extended ahead of the BoC monetary policy decision on Wednesday. 

Technical levels to watch

Renewed weakness below 1.2375-70 area could get extended back towards 1.2340 level (Friday's low) before the pair eventually drops to the 1.2300 handle. 

On the upside, sustained recovery beyond 1.2420 level could trigger a short-covering bounce and lift the pair towards 1.2455-60 horizontal resistance en-route the 1.25 psychological mark.