The Canadian dollar is facing a dilemma because usually during the month of July, according to its seasonal pattern it tends to drop. However, after recent USDCAD rally, it might be the case we’re running out of steam to continue pushing higher. On the upside, the next big hurdle comes at the big psychological number 1.3500 and as long as we trade below this level there is a risk we will be pulling back in July. On the downside, the first key support level comes at previous swing high 1.3125 but the line in the sand remains the big round number 1.3000. A break below 1.3000 will open the door for 1.2920 followed by 1.2645. The stochastic indicator is moving away from overbought territory which supports the bearish case scenario. In terms of fundamental risk events, the trade war rhetoric is the greatest threat to the Canadian dollar because it will make it harder for the BOC to raise interest rates. Previous USDJPY Monthly and Weekly Forex Forecast

USDCAD Monthly Forex Forecast for July 2018