Canadian Dollar Continues to Feel the Heat Against USD, EUR and GBP; Outlook Remains Poor for CAD

"The USD/CAD rally extended nicely yesterday, taking funds through the mid 1.04 resistance zone, reflecting the broadly better bid big dollar," notes Shaun Osborne at TD Securities.

According to Osborne, "chatter through the overnight market has centred on heavy selling interest around and a little above 1.05.  Today, a combination of firm US weekly claims, housing and preliminary PMI data might contrast with the expected softening in Canadian retail sales growth in June after the outsized rally in May to give USD/CAD a shout a testing the 1.0510/20 area."

The Outlook for USD Dollar vs Canadian Dollar: USD favoured

Camilla Sutton at Scotiabank says she is biased towards the US Dollar:

"Bullish with technicals providing no warning that the rally is nearing completion. Most technical studies are in buy territory and the RSI at 62 provides plenty of upside room before USDCAD reaches overbought levels.

"Support lies at recent congestion at 1.0445; while once above 1.0500 resistance is fairly light until the July high of 1.0609. We have reached our near‐term target of 1.0450 but we remain biased to be long USD/CAD."

Osborne says: "From a technical point of view, USD/CAD looks well supported now above the 1.044050 area (key support).  Trend momentum is strong, so expect limited downside.  Target remains 1.0600/50."