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USD/CAD dropped to seven-month lows at 1.3192 on Thursday, the lowest since January 30. Given the six week down channel in the loonie and the decline of the US dollar against all the majors over the past month, an attempt on support was inevitable. The weak recovery and general USD selling augurs for another attempt in the near future, according to FXStreet’s analyst Joseph Trevisani.

Key quotes

“While the USD/CAD has shared in the dollar slippage of the past month it had failed to break to new post-pandemic lows until Friday. The USD weakness, which has been based on the suspected economic effect of the second wave of COVID-19 cases, and general USD selling predicts another try in the near future.”

“Though all other major pairs saw new dollar lows over the past two weeks, none were retained as US data has become stronger and Covid’s second wave began washing ashore in Europe, Australia and elsewhere even as it seems to be receding in the US.”

“The outlook for the USD/CAD in the week ahead depends on the promise of July’s US and Canadian statistics. In the States, we have housing starts and existing home sales and in Canada retail sales and ADP employment.”