USDCAD declined after the Fed held as expected and advance US GDP for Q2 was lower than the consensus. The Bank of Canada held earlier in July and commented on an easing situation of inflation, which suggests that the current difference in rates is likely to persist and favour the greenback. There is some negativity from threatened further American tariffs on Canada and the possibility of this round of hostilities in the Gulf driving demand for the US dollar as a haven.
The upcoming death cross of the 20 SMA below the 50 from Bands might in itself suggest further losses, but the area around $1.40 which was testing unsuccessfully earlier in July might be a support. With the slow stochastic close to neutral, ATR and volume little changed for most of July and Bollinger Bands contracting, many signs point to a lull in August as would usually be expected.
Recovery by the greenback is certainly possible but might depend on the dual job report on 7 August. $1.425, the area of June’s high, would be a possible medium-term target. Overall the fundamental situation, especially divergence in monetary policy and job data, makes it difficult for the moment to map out a sustained period of losses.
This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.