Canadian Dollar Edges Lower as Risk-Off Flows Lift the US Dollar

The Canadian Dollar weakened slightly against the US Dollar (USD) on Thursday, reflecting continued risk-off sentiment in global markets. USD/CAD traded near 1.3671, adding to last week’s 1.5% decline after the pair briefly hit 15-month lows near 1.3480.

Despite the modest fall, the Loonie remains under pressure as investors await fresh economic data from both Canada and the US.

Market Drivers for the Canadian Dollar

• Safe-haven flows: Investors continue moving into the US Dollar amid uncertainty.
• US labor metrics: Weak employment figures weighed on risk appetite.
• Canadian jobs report: Key labor data is expected on Friday, offering potential direction for CAD.
• Delayed US NFP: Nonfarm Payrolls release postponed to next Wednesday due to a federal funding freeze.

The combination of global caution and missing US data has left the Canadian Dollar struggling to regain momentum against the Greenback.

Canadian Dollar Technical Analysis

• Current level: USD/CAD at 1.3671
• 50-day EMA: 1.3779 – immediate resistance
• 200-day EMA: 1.3862 – broader resistance ceiling
• Stochastic (14,5,5): 38.48 – stabilizing momentum but still weak

Price remains below both the 50- and 200-day EMAs, reinforcing a bearish bias. Short-term rallies are likely corrective unless USD/CAD closes above the 50-day EMA, which could then target the 200-day EMA.

Momentum recovery above the oscillator midline would be needed to confirm a stronger rebound. Otherwise, sellers are expected to dominate, keeping the Canadian Dollar under pressure against the Greenback.

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