Canadian Dollar churns on holiday Monday markets

• The Canadian Dollar went nowhere fast, straining against familiar lows.
• Canada is thinly-represented on the economic calendar this week.
• Key US CPI inflation data this week will dominate market flows.

The Canadian Dollar (CAD) is tepid to kick off a new trading week, circling familiar lows against the Greenback as the USD/CAD chart settles into a congestion pattern. A lack of meaningful momentum behind the Loonie has left the Canadian Dollar in the lurch, struggling to hold onto territory at the top end of a long-term consolidation pattern.

Canada is drastically under-represented on the economic calendar this week, with only low-tier data on the offering. Canadian markets are still shuttered for the Remembrance Day holiday, giving Canadian institutions a long weekend. CAD markets will return to the fold on Tuesday, with little of note on the data docket to make much fuss about.

Daily digest market movers: Holiday markets make for a quiet CAD

• Canada is taking Monday off for a long weekend as the nation observes Remembrance Day.
• Overall market sentiment is fairly bullish, but lackluster CAD is struggling to gain ground against the safe haven US Dollar.
• Loonie traders will have to wait until next week’s Canadian Consumer Price Index (CPI) inflation update for any hope of CAD-centric data drivers to push markets in either direction.
• US CPI inflation due this Wednesday will likely push additional volume into Greenback flows.
• Despite waffling inflation figures, an easing CPI print is unlikely to bolster the Loonie: lackluster economic figures in Canada amid deflating inflation figures has the Bank of Canada (BoC) scrambling to cut rates at an accelerated pace, but the lead-in time required for rate cuts to have an effect has left investors wondering if its too little, too late from the Canadian central bank.

Canadian Dollar price forecast

The Canadian Dollar (CAD) has found itself trapped in a sideways pattern against the US Dollar which has plagued the USD/CAD chart since late-2022. The CAD has weakened appreciably against the US Dollar, sending USD/CAD up the charts over 4% from September’s lows near 1.3400. USD/CAD is knocking into 1.3960, a familiar ceiling for price action since the pair rose into the region in October of 2022.

A familiar congestion pattern could see technical traders stepping in to short the Greenback against the Loonie, but investors hoping to step into CAD bidding will need some sign of strength from either the BoC, the Canadian economy, or the Loonie itself, or ideally, all three.

USD/CAD daily chart