Canadian Dollar Bullish Recovery Runs Out Of Gas On Tuesday -

Canadian Dollar Bullish Recovery Runs Out Of Gas On Tuesday

Jan 07, 2025Jeremy ParkinsonFinance0

Photo by Michelle Spollen on Unsplash
The Canadian Dollar (CAD) crimped a recent bullish recovery, halting in place on the charts and cycling familiar levels against the Greenback on Tuesday. The Loonie has recovered some ground after tumbling to multi-year highs at the tail-end of 2024, but bullish momentum remains elusive.Canada’s Ivey Purchasing Managers Index (PMI) figures disappointed CAD traders that were looking for a reason to buy. Business activity survey results continue to miss the mark, and a low-impact upswing in trade figures in November was too low-tier to produce an upshot in market flows.

Daily digest market movers: CAD waffles as markets await further signs

Canadian Exports and Imports both rose last November, but the data was too long-dated and low-impact to meaningfully direct CAD moves.

Canada’s headline Ivey PMI for December fell to a 12-month low of 44.3 compared to November’s 49.7 as business activity expectations contract sharply.

Despite the headline crunch, the seasonally-adjusted Ivey PMI rose to 54.7 from 52.3, but still missed the forecast print of 55.4, a decidedly lofty expectation.

US business activity survey results took center stage on Tuesday as the ISM Services PMI for December surged to 54.1 versus the expected 53.3 and previous 52.1.

Rising business activity and production costs in the US are reigniting fears of a lack of Federal Reserve (Fed) rate cuts in 2025, cooling risk appetite.

Friday’s upcoming Nonfarm Payrolls (NFP) print will take on renewed interest as investors look for reasons to continue hoping for fresh rate cuts.

Canadian Dollar price forecast
USD/CAD rose to multi-year highs in December, clipping north of the 1.4400 handle before price action settled into a rough sideways grind, keeping bids just south of the key price level. Loonie markets have finally plugged the slow bleed that dragged the Canadian Dollar to its lowest prices against the Greenback since the pandemic, but a firm bullish recovery remains elusive.1.4300 is firming up as an immediate technical floor. Even if CAD flows are able to generate enough momentum to pierce the key level, a rising 50-day Exponential Moving Average (EMA) will pose the next immediate risk rising into 1.4200. USD/CAD daily chart More By This Author:GBP/USD Caught A Thin Rebound On Friday
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