After a period of strength there are signs that Canada’s dollar could be starting to fade.

Could those looking to buy Canadian dollars be about to see a turn in fortunes for the better?

The most recent note from a prominent Toronto-based analyst suggests this could indeed be the case. The call comes as we notice that the oil price recovery has also stalled confirming the important link between oil and the CAD.

At the time of writing, the following FX levels are observed:

The spot market British pound to Canadian dollar exchange rate (GBP-CAD) is at 1.8408.The spot euro to Canadian dollar exchange rate (EUR-CAD) is 0.6 pct higher at 1.3140.The US dollar v Canadian dollar exchange rate (USD-CAD) is 0.42 pct higher at 1.2235.Beware. All currency quotes mentioned above refer to the wholesale market. Your bank will affix a discretionary spread when transferring money internationally. However, an independent provider will seek to undercut your bank's offer, thereby delivering up to 5% more currency in some instances. Please learn more.

We bring the latest forecasts from analyst Shaun Osborne at TD Securities in Toronto in order to try and answer the always-important question concerning where the CAD is headed next.

USD v CAD Forecast: 1.23 Level is Key

Price action in USDCAD remains weak from an overall perspective but there are some nuggets of strength in short-term price action that suggests the USD may steady, if only briefly, after last week’s lurch lower.

The squeeze higher in the USD from last week’s low does imply a potential (short-term) low in place via a large “hammer” signal on the 6-hour candle chart.

But follow through (or confirming) price action has been non-existent so far and the short-term trend remains adverse for funds.

Bear trend momentum is weakening but unless the USD regains 1.23 soon, we suspect that USDCAD may tilt lower again.

GBP v CAD: Attractive Buying Levels for Pound Sterling Buyers

GBPCAD has conformed broadly with our technical expectations over the past few weeks; after topping out in February, we have been looking for a drop back to the 1.83 area—in effect, a retest of the broader bull break out seen at the start of the year.

The trend lower in the cross remains strongly entrenched on the charts but, after eight consecutive weeks of losses, the GBP might start to stabilize near-term.

We think these kinds of levels are starting to look attractive for GBP buyers from a medium-term point of view but we want to see clear signs of a trend change before getting long.

EUR v CAD Outlook: 1.31 Ahead

We noted the positive price action in EURCAD after last week’s rebound from the low 1.3000s but we also cautioned that, despite the strongly positive price signal (bullish key reversal day on Friday) any bounce in the cross would likely struggle against the strength of the underlying trend lower.

That warning looks more relevant this morning as the cross is drifting lower to 1.31, more than a big figure off Friday’s high.

Intraday, we look for more downside pressure on the cross while the market remains below 1.3150.

We think the broader bear trend is liable to carry the cross to sub-1.30 levels in the next few weeks.