The Canadian Dollar (CAD) exhibited a mixed performance on Thursday, remaining within familiar technical levels as markets digested conflicting US economic data. While weaker-than-expected US GDP fueled rate cut hopes, stubbornly high inflation figures tempered those expectations.
Key Factors:
- Conflicting US Data: Disappointing US GDP suggests a potential slowdown, favoring a less hawkish Fed stance. However, rising PCE inflation highlights ongoing inflationary pressures, challenging the case for rate cuts.
- Focus Shifts to Canadian Data: With no major Canadian economic releases this week, the CAD’s trajectory will hinge on next week’s MoM GDP for February and S&P Global Manufacturing PMI.
Technical Analysis: Rangebound Trading Continues
- Tight Range: The CAD trades within a narrow range near the 1.3700 handle against the USD, with near-term support around 1.3660.
- Upside Resistance: A breakout above the 200-hour EMA (1.3710) and the supply zone below 1.3600 are necessary for sustained upward momentum.
Outlook:
The CAD awaits next week’s Canadian data releases for further directional cues. Market reactions to those releases will likely be crucial in determining whether the CAD can break out of its current range.
