MUFG Research maintains a neutral bias on USD/CAD in the near-term.

"The CAD has weakened against the USD over the past week, after USD/CAD failed to break below the lower end of the 1.3500–1.3900 trading range that has persisted for most of this year. The USD has been supported both by the lack of progress in negotiations between Iran and the U.S. to end the conflict and reopen the Strait of Hormuz, and by a recent run of upside U.S. economic data surprises that has prompted a more hawkish repricing of Fed rate expectations," MUFG notes.

"Our short-term valuation model for USD/CAD incorporating oil prices, yield differentials, and equity market performance, suggests that fundamentals are currently unlikely to drive a breakout from the current 1.3500–1.3900 trading range in the near term," MUFG adds.