The Canadian Dollar (CAD) remained flat on Monday, reacting to a lackluster performance from Federal Reserve Chair Jerome Powell during his semi-annual testimony before Congress. With little domestic economic data to influence its movement, the CAD has become more susceptible to broader market trends.
Powell’s remarks, which reiterated the Fed’s commitment to holding interest rates steady until inflation convincingly reaches its 2% target, disappointed investors hoping for a more dovish tone. This perceived hawkishness boosted the US Dollar (USD) and dampened risk appetite across markets.
Key Events and Market Outlook
Investors now await Powell’s second testimony before the House Committee on Financial Services on Wednesday, though no significant changes in messaging are expected.
The focus then shifts to Thursday’s release of the US Consumer Price Index (CPI) for June, followed by Friday’s Producer Price Index (PPI). These reports will be crucial in gauging inflationary pressures and shaping expectations for future Fed policy moves.
USD/CAD Technical Analysis
The USD/CAD pair remains trapped in a tight range around 1.3640, unable to break above the 200-hour Exponential Moving Average (EMA) at 1.3656. Daily candlesticks indicate a stalemate between the 200-day EMA at 1.3590 and a supply zone near 1.3750, suggesting ongoing indecision in the market.
