- The Canadian Dollar stuck to familiar territory on Friday.
- The Loonie is trapped in a hard congestion zone against the Greenback.
- CAD traders forced to wait through a long weekend before key Canadian inflation data.
The Canadian Dollar (CAD) continued its back-and-forth pattern against the US Dollar (USD) on Friday. The Loonie pared away the previous day’s gains and kept USD/CAD pinned near the 1.4000 handle. Global market attention remains firmly transfixed on the Trump administration’s constantly changing trade policy strategy, keeping investor risk appetite trapped in an on-again, off-again cycle.
The latest round of Canadian inflation data is rounding the corner with the Canadian Consumer Price Index (CPI) slated for next Tuesday. However, Loonie traders will first have to survive a long weekend with Canadian markets shuttered for the upcoming Victoria Day holiday on Monday.
Daily digest market movers: Canadian Dollar remains stuck in a rut
- The Canadian Dollar continues to churn chart paper near the 1.4000 level against the Greenback. The Loonie shed one-fifth of one percent against the USD on Friday, keeping USD/CAD firmly embedded in near-term consolidation.
- The University of Michigan (UoM) Consumer Sentiment Index showed another drop in consumer economic expectations, sinking to the second-lowest print on record for the key sentiment indicator.
- US consumer inflation expectations have also risen to multi-year highs as price impacts from tariffs loom just over the horizon.
- Wall Street has broadly brushed off souring consumer sentiment; however, consumers and investors share tariff concerns.
- Canadian CPI inflation figures are due next week; headline CPI inflation for the year ended in April is expected to droop sharply to 1.6% YoY, and fall well below the Bank of Canada’s (BoC) 2% target band.
Canadian Dollar price forecast
Middling is the name of the game for the Loonie in recent chart action. USD/CAD remains firmly entrenched in a consolidation phase, with bids stuck just south of the 1.4000 handle. Price action has become hung up on the 200-day Exponential Moving Average (EMA), and it will take a significant push to generate a break and retest of key technical levels before a trend in either direction can be established.
USD/CAD daily chart
