Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) drifted higher on Wednesday, driven by a general upswing in broad-market sentiment that pushed the safe-haven US Dollar (USD) into a holding pattern. The Loonie has risen for three out of the last four trading sessions, extending a near-term CAD bounce from recent lows.

Canadian data remained largely absent from the economic calendar through the front half of the trading week, keeping CAD momentum limited. Key Canadian Gross Domestic Product (GDP) growth figures due on Friday are set to be eclipsed by the latest round of US Personal Consumption Expenditures Price Index (PCE) inflation numbers, which are also due on Friday.

Daily digest market movers: CAD catches a bid on thin Greenback markets

• The Canadian Dollar rose around one-third of one percent against the US Dollar on Wednesday.
• As the USD/CAD pair eases back from recent highs, price action could be poised for a technical bounce from the 50-day Exponential Moving Average (EMA); traders should watch out for any immediate reversals.
• Canadian GDP growth figures are expected to show a 0.6% contraction in Q2.
• Before that, Loonie traders will need to escape another US GDP print unscathed on Thursday.
• Friday will poise a complex intraday problem for CAD traders: on top of Canadain growth data, markets will be faced with the simultaneous release of the latest US PCE inflation figures from July.
• Core US PCE inflation is expected to tick upwards on a yearly basis as tariff-led inflation continues to bleed through into headline inflation data.

Canadian Dollar price forecast

The Canadian Dollar has clawed back over a full percent against the US Dollar after hitting a 13-week low last Friday. USD/CAD has chalked in a bearish rejection of the 200-day EMA near 1.3880, while the 50-day EMA is providing an immediate technical floor from 1.3777. The pair’s higher-lows pattern remains intact, though a drop through 1.3750 will put USD/CAD back on track to revisit the 1.3600 handle.

USD/CAD daily chart

(Click on image to enlarge)

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