Photo by Michelle Spollen on Unsplash

The Canadian Dollar (CAD) eased lower against the US Dollar (USD) on Monday, albeit on notably weak market flows, shedding under one-tenth of one percent against the Greenback. Canadian and US markets are shuttered functionally across the board thanks to a shared Labor Day holiday, and markets will be waiting for North American markets to return from their long weekend in full force on Tuesday.

The Canadian Dollar ran out of runway on Monday, snapping a four-session winning streak and posting its first loss against the Greenback in exactly one week. The Canadian economy is broadly slowing down faster than analysts expected, thanks to a slow-motion trade war with the US and US President Donald Trump’s high tariffs. Damage is expexted to continue pressing down on Canadian economic activity, and despite market hopes for further central bank interest rate cuts on both sides of the 49th parallel, the Loonie is still running largely at the mercy of broad-market US Dollar flows.

Daily digest market movers: Canadian Dollar stumbles ahead of US-data heavy week

• The Canadian Dollar ended it’s near-term winning streak against the US Dollar.
• USD/CAD has found a messy technical floor near 1.3740.
• Both Canadian and US labor data is due at the end of the week, but US Nonfarm Payrolls (NFP) will handily dominate investor attention spans as the days tick toward Friday.
• Both Canadian and US net job numbers are expected to continue slowing down, bolstering bets of central bank cuts from both the Bank of Canada (BoC) and the Federal Reserve (Fed).
• Canadian economic data remains muted through the majority of the week, leaving US data front and center.

Canadian Dollar price forecast

The Canadian Dollar’s near-term bull run looks set to draw to a close, with one-sided Greenback weakness poised to run out of runway. USD/CAD has fallen over 1.4% top-to-bottom from two-week highs near 1.3930 to fresh lows near 1.3725. The 200-day Exponential Moving Average (EMA) remains a key technical ceiling on bearish Loonie flows, but CAD momentum remains deeply constrained.

USD/CAD daily chart

(Click on image to enlarge)

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