USD/CAD: CAD drifts back to the upper 1.35s - Scotiabank

The Canadian Dollar (CAD) is drifting back to very familiar ranges this morning. Spot is finding it hard to break away from the upper 1.35 area and, with trading looking relatively subdued today, that may not change in the short run, Scotiabank's Chief FX Strategist Shaun Osborne notes.

Technicals lean USD-bearish

"Extended periods of narrow range trading eventually give way to more directionally dynamic trading but there is simply no catalyst to drive movement at the moment. Spot remains close to estimated equilibrium (1.3548 today)."

"Canadian Retail Sales are expected to rise 0.6% in the July month (Scotia at 0.5%), with ex-auto sales rising 0.3%. Retail activity was weak in June, although volume sales advanced marginally. Statcan's 'flash' estimate for July sales, released with the June data, pointed to a 0.6% rise."

"A weak close on day Thursday for the USD developed a large, bearish outside range signal on the daily chart which tilts near term risks to the downside and should reinforce USD resistance in the mid-1.36 zone from here. Minor gains for the USD today look consolidative ahead of renewed softness. Loss of short-term support at 1.3535/45 should see USD weakness extend a little more."