Canadian Dollar skittish on Tuesday despite improving Ivey PMI

• Canadian Dollar easing but sticking to midrange.
• Canada Ivey PMI beat expectations in April.
• CAD markets wait for Friday's Canadian labor data.

The Canadian Dollar (CAD) was broadly softer on Tuesday but stuck close to near-term technical levels as CAD markets shrugged off better-than-expected Ivey Purchasing Managers Index (PMI) figures from Canada. Markets await soundbites from Federal Reserve (Fed) policymakers as investors broadly focus on the Fed's rate cut outlook.

Canada saw an improvement in the seasonally-adjusted Ivey PMI for April, signaling that business leaders in both the private and public sectors of Canada's economy see an improvement in overall business activity. However, battered Crude Oil markets and floundering barrel prices limit the CAD's ability to find higher ground.

Daily digest market movers: Upbeat Canadian PMIs fail to spark bullish interest

• Canada's seasonally-adjusted Ivey PMI for April improved to 63.0 from 57.5, beating the forecast of 58.1.
• April's Ivey PMI hit a two-year high, printing its highest activity survey result since May of 2022.
• Broader markets continue to focus on Fedspeak as investors hope for signs of rate cuts from the Fed.
• Thursday's Financial System Review from the Bank of Canada (BoC) is widely expected to produce market moves.
• CAD traders looking out for Friday's Canadian Net Change in Employment and Unemployment Rate numbers.
• Canada's Net Change in Employment forecast to add net 20K jobs in April after the previous month's -2.2K decline.
• The Canadian Unemployment Rate is expected to have increased to 6.2% in April, up slightly from the previous month's 6.1%.

Technical analysis: Canadian Dollar stubbornly swims in familiar circles

The Canadian Dollar (CAD) is broadly softer on Tuesday, giving up most of Monday's early gains to trade into familiar bids. The CAD is flat to down across the board, shedding around a third of a percent against the New Zealand Dollar (NZD) and the Euro (EUR). The CAD is also down around a quarter of a percent against the US Dollar (USD).

USD/CAD rose into touching range of the 1.3700 handle on Tuesday with the CAD shrugging off Monday's slim gains. The pair is trading into congestion near the 200-hour Exponential Moving Average (EMA) at 1.3697, and the Canadian Dollar has leaked away most of the gains found after last Friday's US Nonfarm Payrolls (NFP) print dragged the pair down to 1.3610.

Daily candlesticks show USD/CAD finding near-term technical support from the 50-day EMA at 1.3629, with long-term bullish pressure from the 200-day EMA at 1.3552. The pair is still down from mid-April's peak near 1.3850, but USD/CAD is still trading higher for the year, up 3.4% from January's opening bids near 1.3250.

USD/CAD hourly chart

USD/CAD daily chart