Canadian Dollar holds steady as markets await key movers

• The Canadian Dollar remains entrenched near 1.38 against the Greenback.
• Investors are expecting a trade showdown between President Trump and Prime Minister Carney.
• Fed rate call expected to keep rates steady, but policymaker language will be key this week.

The Canadian Dollar (CAD) is holding steady against the US Dollar (USD) to kick off the new trading week, with USD/CAD holding steady near the 1.3800 handle. Trade tensions continue to simmer away on the back burner between the US and Canada, and an incoming discussion between US President Donald Trump and newly-minted Canadian Prime Minister Mark Carney is expected to deliver some sparks.

The latest batch of key Canadian employment figures are due at the end of the week, but the key headline generators for Loonie traders will be this week's Federal Reserve (Fed) rate call. A fresh round of trade-focused talks is expected to kick off following a key meeting between PM Carney and President Trump.

The Trump administration continues to ramp up combative rhetoric about 'folding' Canada into the United States in a direct attack on Canadian sovereignty. Meanwhile, PM Carney is expected to put President Trump into the hot seat about deteriorating trade conditions between Canada and the US.

Daily digest market movers: Canadian Dollar holds steady as investors weigh incoming risk factors

• The Fed's latest rate call, slated for Wednesday this week, will be a key piece in the investor puzzle despite markets broadly expecting another hold on rates. Fed policymaker rhetoric will take center stage as investors look for signs that the Fed will begin pivoting toward another rate-cutting cycle.
• Canadian employment figures are slated for Friday, but that looms a long way off.
• Trade talks are expected to ramp up in coming weeks after PM Carney's widely anticipated meeting with the Trump administration, expected on Tuesday.
• A delegation of key northern states is also expected to meet with Canadian PM Carney separately, which is poised to raise tensions with the Trump administration.
• President Trump insists he's "not sure" what Carney wants to meet him about, despite Carney openly stating that the old Canada-US relationship based on integration "is over". According to PM Carney, "Our focus will be on both immediate trade pressures and the broader future economic and security relationship between our two sovereign nations."

Canadian Dollar price forecast

Despite a broad-market theme of shorting the Greenback, the Canadian Dollar appears to have found a fresh plateau, with USD/CAD churning out a new congestion pattern near the 1.3800 handle. USD/CAD has backslid from March's peaks near the 1.4500 region, falling back below the 200-day Exponential Moving Average (EMA) near 1.4040.

A firm technical floor remains priced in at 1.3800, however a fresh bout of Loonie strength could easily force the pair into a fresh bearish pattern.

USD/CAD daily chart