FX.co ★ CFD | USD/CAD

On Friday, the spot price experienced a notable decline, trading around the 1.3580 mark as investors moved away from the CAD in search of more attractive assets. The CAD fell by a full percent against the Euro, Japanese Yen, and Swiss Franc, although it managed a modest 0.25% gain against the struggling US Dollar. This mixed performance highlights the CAD’s current volatility and the shifting dynamics in the forex market. US Dollar's Potential Upside Amid Risk Aversion: The US Dollar (USD) could see gains against its peers due to increased risk aversion. Recent data from the US manufacturing sector and labor market have created a complex economic scenario, with signs of a slowdown and growing expectations for a Federal Reserve rate cut. The CME FedWatch Tool indicates that traders are anticipating a 25-basis point rate cut during the Federal Reserve's meeting on September 18. As the market digests recent economic data and anticipates future moves by the Federal Reserve, the CAD, and USD are both navigating a complex landscape. With traders adjusting their strategies based on shifting risk appetites and policy expectations, the CAD’s performance will likely remain influenced by broader market trends and economic indicators. US Dollar Index and Treasury Yields Reflect Market Sentiment: The USD Index, which measures the Greenback’s performance against six major currencies, has dropped to near 104.10. This decline is mirrored by the 10-year US Treasury yields, which have fallen to 3.94%. The market’s expectations for the Federal Reserve to initiate a rate cut at its upcoming September meeting are influencing these movements, suggesting a shift in investor sentiment. H4 Chart Market Sentiment and Future Outlook: On Friday, the pair showed a relatively flat daily candlestick pattern after five consecutive sessions of losses. Despite this brief pause, the pair remains above the 200-day Exponential Moving Average (EMA) at 1.3603, indicating that CAD buyers are struggling to drive the price lower. Currently, price action is contending with the 1.3570 level, struggling to establish a decisive trend.

On Thursday, the price demonstrated a degree of resilience against the US Dollar, yet the pair remains within established trading ranges. The long-term trend appears relatively stable, with current price action nearing the 50-day Exponential Moving Average (EMA) at 1.3561. This marks a 1.58% drop from the previous week’s brief bearish surge above 1.3470, highlighting the persistent difficulty in establishing a clear direction for this currency pair.