The Canadian Dollar Struggles Against the Greenback
- The Canadian Dollar (CAD) hit fresh lows on Friday, as markets favored the safe haven Greenback.
- US Retail Sales slightly missed expectations, boosting the US Dollar and sending USD/CAD to multi-year highs.
Despite Canada’s absence from the economic calendar this week, the Canadian Dollar remains under pressure. Traders are eagerly awaiting next Tuesday’s Canadian Consumer Price Index (CPI) print, but its impact may be limited given the current economic conditions.
Key Market Movers for the Canadian Dollar
- The Canadian Dollar hit a 54-month low on Friday, with USD/CAD reaching 1.4090 for the first time since May 2020.
- Canada is lacking significant economic data, leaving the Canadian Dollar vulnerable.
- The upcoming Canadian CPI inflation print may not provide much support, as the Bank of Canada is already taking steps to address cooling inflation and economic imbalances.
- Canada’s economy heavily relies on the continued rise in housing and shelter prices, posing risks to its economic stability.
- US Retail Sales exceeded expectations but still decreased in October, indicating a slowdown in consumer spending.
Forecast for the Canadian Dollar
The Canadian Dollar is facing downward pressure against the Greenback, with USD/CAD testing highs near 1.4100. The pair is likely to extend its gains, closing higher for the sixth consecutive trading day.
The nearest support level is around 1.3780, aligned with the 50-day Exponential Moving Average (EMA).
Technical Analysis: USD/CAD Daily Chart