Canadian Dollar Weakens Against USD, Struggles Amid Thin Data and Technical Resistance

Canadian Dollar Weakens Against USD as Technical Resistance and Thin Data Weigh on Markets

The Canadian Dollar (CAD) experienced a decline against the US Dollar (USD) on Wednesday, unwinding the small gains made earlier in the week. As the USD/CAD pair moves back toward the 200-day Exponential Moving Average (EMA), it highlights a struggle to maintain momentum. The back-and-forth trading pattern in the pair points to indecision in the market, as the CAD faces resistance and finds itself drifting into long-term averages.

This week, the economic calendar for Canada is notably light, with very few impactful data releases, which has contributed to the CAD's weakness. Instead, traders have shifted their focus to global market developments, particularly news surrounding the Trump administration. With a lack of Canadian economic news, the CAD is vulnerable to external factors influencing global risk sentiment.

Looking ahead, the Canadian Dollar is expected to gain some direction next week when the Consumer Price Index (CPI) data is released. The CPI figures will be closely watched, as inflation data could potentially influence future Bank of Canada policy decisions and provide traders with clearer guidance on the CAD's near-term outlook.