USD/CAD drops to near 4-week lows, inching closer to 1.25 handle

The greenback continued losing ground against its Canadian counterpart, with the USD/CAD pair slipping to near 4-week lows and closer to the key 1.25 psychological mark. 

The pair prolonged its rejection slide from the 1.2600 handle and traded with a mild negative bias for the third consecutive session amid stronger crude oil prices, which was seen lending support to the commodity-linked currency - Loonie. 

Also collaborating to the pair's offered tone was fragile sentiment around the US Dollar, which remained on the defensive following the US President Donald Trump's threat on Tuesday to shut down the government to secure funding for a border wall with Mexico. 

It, however, remains to be seen if the pair extends its near-term downward trajectory or is able to find some buying interest at lower levels amid some renewed concerns over global oil supply glut. 

Moreover, cautious sentiment, ahead of the keenly awaited Jackson Hole Symposium, might hold investors back from initiating any aggressive bets and hence, could possibly limit any further downslide, at least for the time being.

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Ahead of the highly anticipated Fed Chair Janet Yellen's speech, the release of durable goods orders from the US would be looked upon for some short-term trading opportunities during early NA session.

Technical levels to watch

On a sustained weakness below the 1.25 handle, the pair is likely to accelerate the slide towards 1.2440-35 horizontal support, which if broken would pave way for continuation of the pair's bearish trajectory. 

On the flip side, any recovery attempts might now confront some fresh supply near mid-1.2500s, above which the pair is likely to make a fresh attempt towards reclaiming the 1.2600 handle.