Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) found a fresh round of bidding strength on Wednesday, lurching into its highest levels against the US Dollar (USD) in a week. Loonie gains are unlikely to extend into meaningful change for the CAD, as Greenback losses are strictly on the back of renewed market confidence in impending Federal Reserve (Fed) interest rate cuts in December rather than any intrinsic strength behind the Canadian Dollar.

Canadian Gross Domestic Product (GDP) growth figures are due later this week on Friday. CAD traders will be looking for a rebound in quarterly GDP numbers as the Canadian economy grapples with ongoing fallout from the Trump administration’s lopsided trade war strategy of shooting itself in the foot with arbitrary tariffs. However, an encroaching US Thanksgiving holiday will see market volumes constrained heading into the end of the week.

Daily digest market movers: Canadian Dollar finds one last burst of strength before holiday closures

• The Canadian Dollar gained ground against the battered US Dollar, pushing USD/CAD back below the 1.3100 handle after a brief bout of consolidation.
• USD/CAD remains on the bullish side of key averages, implying Loonie momentum will be short-lived.
• US markets will be closing early on both Thursday and Friday as Americans take time off for Thanksgiving. 
• Canadian GDP figures due on Friday are expected to show a meager rebound in the third quarter from a sharp contraction in Q2.
• Federal Reserve (Fed) rate cut expectations remain the key driver in markets, forcing the US Dollar lower as traders expect a third straight Fed rate cut on December 10.

Canadian Dollar price forecast

USD/CAD is facing newfound pressure after losing a grip on the 1.4100 handle. The pair holds above the rising 50-day Exponential Moving Average (EMA) at 1.3992 and the 200-day EMA at 1.3920, keeping the broader bias tilted higher. The 50-day EMA stands above the 200-day EMA and both slope upward, confirming trend support. The Relative Strength Index (RSI) at 50.74 is neutral; a sustained push through 60.0 could reinforce upside momentum.

The slow Stochastic oscillator (14,5,5) hovers near 70.0 and is in the process of pivoting higher, signaling improving bullish momentum without overbought strain. As long as pullbacks stay contained above the shorter average, the uptrend would remain intact, while a break beneath it would risk a deeper retracement toward the longer one. Overall, the rising moving averages keep the advantage with buyers, with momentum metrics not yet capping the advance.

USD/CAD daily chart

(Click on image to enlarge)

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