According to Richard Franulovich, Strategist at Westpac, buying USD/CAD around 1.3085 could be a good opportunity with a target at 1.3285 and a stop loss at 1.3025. The main risks ahead are the Bank of Canada paying little attention to global risks, Canadian labour market data and FOMC minutes and Fed Chair Powell with a strong dovish lean.

Key Quotes:

“CAD was the strongest G10 currency in June but prospects for further USD/CAD declines face tougher technical resistance into 1.3000, the area coinciding with a range of key supports.”

“BoC rate cut pricing remains very guarded; only 11bp in cuts priced to Dec 2019, less than the Fed (-64bp), the RBNZ (-40bp), the RBA (-22bp), the ECB (-16bp) and even the SNB (-18bp) and the BoE (-14bp). Firming inflation and a decent BoC business survey will encourage the BoC next week to reiterate an optimistic tone but global risks have grown and the Bank may well amplify these concerns.”