Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) kicked off the December trading month on soft footing, snapping a four-session winning streak and skidding to a halt near key moving averages against the US Dollar (USD). Risk-off sentiment put some renewed bidding pressure below the Greenback, pushing USD/CAD back into a technical battleground near the 1.4000 price handle.

Canadian S&P Global Purchasing Managers Index (PMI) for the manufacturing sector declined in November, showing continued (and accelerating) declines in both output and new orders. On the US side, November’s S&P Global PMI rose, but the underlying factors continue to worry investors as the late-year upswing in factory production helped to hide a worrying decline in new order activity.

US ADP Employment Change figures for November will lead the way on the economic data docket during the midweek, followed by Canadian labor data on Friday. The latest consumer sentiment survey results from the University of Michigan (UoM) will also be released on Friday to round out the trading week.

Daily digest market movers: Canadian Dollar loses bullish momentum to start December

•  The Canadian Dollar fell one-fifth of one percent against the US Dollar in the first session of December’s market window, snapping a five-session winning streak.
• A near-term stall in recent Loonie strength has drawn a sharp technical floor on the USD/CAD chart, chalking in a support zone at the 1.4000 major price handle and the 50-day Exponential Moving Average (EMA).
• Canada’s November S&P Global Manufacturing PMI sank to 48.4 from the previous 49.6 as industrial activity faces fresh headwinds, presumably from ongoing trade pressures as the Trump administration works to revamp its own USMCA deal, which was touted as the “deal of the century” during Donald Trump’s first term.
• On the US side, S&P Global Manufacturing data swung higher in November, rising to 52.2 from 51.9, driven by a climb in overall manufacturing activity. 
• However, the increase in running machines is getting overshadowed by a worrying contraction in new orders, implying that recent improvements in manufacturing activity are dedicated to filling out inventories rather than heading downstream immediately.
• Key data this week will be Wednesday’s US ADP Employment Change data, while Loonie traders will be forced to wait until Friday’s Canadian wages and labor data. Canadian Net Change in Employment is expected to fall to a flat 0K in November, while the Unemployment Rate is expected to tick up again to 7.0% from 6.9%.

Canadian Dollar price forecast

USD/CAD daily candlesticks have found a fresh consolidation patch near the 1.4000 price handle on Monday. The 50-day EMA at 1.3993 continues to climb above the 200-day EMA at 1.3922, keeping the broader bias on the upside. Price holds above both averages, though the short-term slope has softened. RSI at 46 (neutral) signals contained momentum after the recent overbought reading. Immediate support sits at the 50-day EMA at 1.3993, with secondary support at the 200-day EMA at 1.3922.

Stochastic at 41.52 shows waning momentum, aligning with the RSI’s neutral stance. A daily close above the 50-day EMA at 1.3993 could revive upside extension, while a drop through the 200-day EMA at 1.3922 would shift the bias toward a deeper retracement.

USD/CAD daily chart

(Click on image to enlarge)

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