Image Source: Unsplash

• The Canadian dollar has been catching some air as the broad-market US Dollar Index has been receding.
• The Bank of Canada is slated to report this week with its next rate call on Wednesday.
• Market sentiment has been improving on Monday, sending the greenback lower.

The Canadian dollar has recently been finding some momentum to kick off the trading week, bolstered by investors finding their risk appetite in early trading. With the US Purchasing Manager Index (PMI), US Gross Domestic Product (GDP), and US Personal Consumption Expenditure (PCE) Index data all due in the upcoming week, the US dollar is going to see plenty of play in the coming days.

The Bank of Canada (BoC) is to bring forth its latest rate call on Wednesday with a press conference to follow. The BoC holding their reference rate at 5% is a foregone conclusion, but investors will be watching for any hints of when the Canadian central bank will begin looking at rate cuts.

Daily Digest Market Movers: Canadian Dollar Buoyed by US Dollar Selling Pressure

• The Canadian dollar has been getting bolstered by broad-market pressure that has been forcing down the US dollar.
• Crude oil has also been seeing declines on Monday, limiting upside potential in the oil-backed Loonie.
• US PMI figures will be released on Tuesday, overshadowing low-impact Canadian housing prices.
• The Canadian New Housing Price Index is expected to show 0.1% gains in September.
• US PMI components are expected to decline slightly; Manufacturing is forecast at 49.5 (last 49.8), and Services is seen at 49.9 (last 50.1).
• The BoC’s next rate call is broadly anticipated to hold at 5%, and investors are hoping for signs that the Canadian central bank will start turning attention to rate cuts sooner rather than later.
• Potential supply constraints stemming from the Gaza Strip conflict have been easing as diplomatic efforts are underway to cool Middle East tensions, pulling back oil bids.

Technical Analysis: Canadian Dollar Finds Room to Stretch in Monday's Mild US Dollar Selloff

The Canadian dollar has been getting a bump up as the US dollar has waned across the broader market space, taking the USD/CAD currency pair lower on Monday and testing below the 1.3700 level.

After Friday’s bump into its highest bids in almost two weeks, the USD/CAD pair appears to be fumbling the 1.3700 handle, setting an intraday low of 1.3675 after slipping from the day’s peak at 1.3736.

Monday’s action has the USD/CAD duo set to print an inside candle to kick off the week, and traders will be keeping an eye on any breakouts from immediate chart territory. Near-term technical support sits at the 50-day Simple Moving Average (SMA), which has recently been rising into 1.3600, while the ceiling sits at the last swing high into 1.3785.

More By This Author: