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• The Canadian dollar stuck to familiar territory on Friday.
• The loonie has recently been trapped in a hard congestion zone against the greenback.
• Canadian dollar traders will be forced to wait through a long weekend before key Canadian inflation data is released.

The Canadian dollar continued its recent back-and-forth movement against the US dollar on Friday. The loonie pared away the previous day’s gains and kept the USD/CAD currency pair pinned near the 1.4000 handle. Global market attention remained firmly transfixed on the Trump administration’s constantly changing trade policy strategy, keeping investor risk appetite trapped in an on-again, off-again cycle.

The latest round of Canadian inflation data will be rounding the corner with the Canadian Consumer Price Index (CPI) slated for next Tuesday. However, loonie traders will first have to survive a long weekend with Canadian markets shuttered for the upcoming Victoria Day holiday on Monday.

Market Movers: The Canadian Dollar Remained Stuck in a Rut

• The Canadian dollar continued to churn chart paper near the 1.4000 level against the greenback. The loonie shed one-fifth of 1% against the US dollar on Friday, which kept the USD/CAD pair firmly embedded in near-term consolidation.
• The University of Michigan (UoM) Consumer Sentiment Index showed another drop in consumer economic expectations, sinking to the second-lowest print on record for the key sentiment indicator.
• US consumer inflation expectations also rose to multi-year highs as price impacts from tariffs have continued to loom just over the horizon.
• Wall Street broadly brushed off souring consumer sentiment. However, it seems that consumers and investors alike have been concerned over tariffs.
• Canadian CPI inflation figures are due next week; headline CPI inflation for the year ended in April is expected to droop sharply to 1.6% year-over-year, and fall well below the Bank of Canada’s 2% target band.

Canadian Dollar Price Forecast

'Middling' has been the name of the game for the loonie in recent trading. The USD/CAD currency pair remained firmly entrenched in a consolidation phase, with bids seen just south of the 1.4000 handle. Price action appeared to be hung up on the 200-day Exponential Moving Average (EMA), and it would take a significant push to generate a break and retest of key technical levels before a trend in either direction could be established.

USD/CAD Daily Chart

(Click on image to enlarge) 

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