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A new trading week is underway, and the Canadian dollar continues to show signs of weakening momentum. This can be seen in recent USD/CAD price action, with the pair gaining nearly 0.7% over the last four trading sessions.
The trading week continues to be particularly relevant for the strength currently being displayed by the Canadian dollar. Over the last two trading sessions, USD/CAD has declined by approximately 0.7%, once again highlighting a bearish bias in favor of the Canadian currency.
Canada’s July CPI rose 3.0%, up from 2.8% in June, though median CPI was more moderate at 2.0% ahead of Wednesday deadline for 50% tariffs on $20B of Canadian exports to the US - what are the implications for USD/CAD?
Over the last few sessions, the USD/CAD has seen a slight appreciation of nearly 0.3% in favor of the US dollar. However, beyond this mild bias, the broader chart picture reflects a prolonged consolidation.
The trading week continues to advance and, for now, the Canadian dollar has started to lose the strength it had shown in previous sessions. USD/CAD movements are barely registering a short-term variation near 0.05%, highlighting a loss of momentum.
The US dollar has flashed a bearish reversal signal just as USD/CAD heads into a packed 24 hours featuring Canadian CPI, Bank of Canada Governor Tiff Macklem and influential Fed Governor Christopher Waller.
Weak Canadian inflation, deteriorating domestic data and a rampant US dollar should have been the perfect recipe for USD/CAD bulls. Tuesday’s price action had other ideas.
Recent sessions have been challenging for the Canadian dollar in the short term, as USD/CAD has extended a streak of six consecutive bullish sessions, with gains of around 1.5% in favor of the U.S. dollar. This move is beginning to establish a solid bullish bias in the short term.
The week begins with a clear bearish bias in USD/CAD, posting a decline of around -0.31% in the short term. Selling pressure has remained consistent, driven by the recovery in the Canadian dollar following the release of inflation data in Canada.
USD/CAD extends a three-week collapse toward key support. Infection risk rises as price approaches the lower bounds of the November downtrend.
The USD/CAD forecast is subject to heightened volatility today as both North American central banks will decide on their respective monetary policies.
The USD/CAD pair has extended a streak of four consecutive bearish sessions, accumulating a decline of more than 1% in favor of the Canadian dollar in the short term, which has begun to consolidate a relevant bearish bias. Downward pressure has remained firm following the release of stronger-than-expected quarterly GDP data, reducing the need for the Bank of Canada to continue cutting interest rates in the near term.
Traders are rethinking the BoC’s easing cycle as Canadian data surprises to the upside, setting the stage for a potential policy pivot. Could this be the start of a sustained USD/CAD reversal?
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