USD/CAD under pressure as RBC warns of dollar overvaluation

RBC Global Asset Management has warned that the U.S. dollar appears significantly overvalued. The firm points to the ballooning U.S. budget deficit—now forecast to surpass $1.9 trillion this year—as a key factor behind its bearish outlook.

RBC's position might be reflected in the FX market with the USD/CAD under pressure. The pair has been forming lower highs and lower lows since late May, suggesting a potential continuation of the short-term downtrend.

Key support levels to watch might include 1.3640, 1.3600, and potentially 1.3560 if selling accelerates. On the upside, a recovery might need to break above 1.3720, with further resistance possibly around 1.3760 and 1.3820.