The Canadian Dollar (CAD) continues to ease back as the 2024 trading year gets underway, extending near-term declines against the US Dollar (USD) to fall a full percentage point as the first trading week of the new year gets underway. The Canadian S&P Global Manufacturing Purchasing Managers’ Index (PMI) accelerated declines on Tuesday to print at a 43-month low as the Canadian economic outlook continues to deteriorate. The US Manufacturing PMI component also printed below expectations, keeping market risk appetite pinned on the low side and propping up the US Dollar on risk aversion. The Canadian Dollar (CAD) has shed around a full percent from Tuesday’s peak bids against the US Dollar, easing back from a 21-week peak and sending the USD/CAD pair rebounding from last week’s lows just below 1.3200.
The USD/CAD has climbed back over the 200-hour Simple Moving Average (SMA) for the first time since mid-December when the pair declined over 3% peak-to-trough from the 1.3600 region. Despite a near-term rebound in the Greenback, the USD/CAD remains firmly planted in bear country with price action well below the 200-day SMA near the 1.3500 major handle, but the technical outlook favors bidders heading into the new trading year. Technical indicators are pinned firmly into oversold conditions, with both the Relative Strength Index (RSI) and the Moving Average Convergence-Divergence (MCAD) signaling ripe buying conditions as the indicators roll over.