Canadian Dollar middles as Loonie flows get pulled in both directions

• The Canadian Dollar remained flat against the Greenback on Thursday.
• Loonie markets remain hamstrung as USD weakness clashes with lower Crude Oil prices.
• Key US consumer sentiment data just around the bend, Canadian data forced to wait until next week.

The Canadian Dollar (CAD) went nowhere fast on Thursday, with the Loonie struggling to find momentum on either side. The US Dollar (USD) was softly lower on the day, however another decline in intraday Crude Oil prices pulled the support rug out from underneath the CAD, keeping the USD/CAD major pair strung along a familiar congestion level just south of 1.4000.

Key Canadian economic data lies ahead next week, but Loonie markets will first need to survive a fresh print in US consumer sentiment figures from the University of Michigan (UoM) on Friday, as well as an extended weekend with Canadian markets shuttered for the Victoria Day holiday next Monday. Loonie traders will return to the fold on Tuesday, just in time for a fresh Consumer Price Index (CPI) inflation update.

The US Dollar is overall weaker on Thursday, which would typically be enough to force the Loonie slightly higher. However, a fresh knock lower in Crude Oil prices is stripping support away from the Canadian Dollar, keeping the Loonie lashed tightly in place against the Greenback.

Daily digest market movers: Canadian Dollar stuck in a rut on Thursday

• The Canadian Dollar remained buried in a flat holding pattern, stuck in familiar territory as the USD/CAD pair churns chart paper just below 1.4000.
• Loonie traders are heading for a long weekend, they just have to survive Friday first.
• Canadian CPI inflation figures due next Tuesday will draw plenty of CAD attention as investors wonder how much deeper the Bank of Canada (BoC) will cut interest rates.
• US Producer Price Index (PPI) inflation chilled faster than expected in April, however tariff impacts have yet to leak into headline economic data, and investors remain leery but cautiously optimistic.
• May's UoM Consumer Sentiment Index is due on Friday, and markets are hoping that US consumers will suddenly feel better about how much they have to pay for goods originating from other countries.

Canadian Dollar price forecast

USD/CAD continues to cycle just below the 1.4000 major handle. The pair is caught in a near-term consolidation phase near the 200-day Exponential Moving Average (EMA) near 1.4030, making it difficult to time a snap in either direction.

Depending on how you view the market, a fresh bout of Loonie weakness, or Greenback strength, pushed USD/CAD up from near-term lows near 1.3750. Technical oscillators have drifted into overbought territory, flashing warning signs that the pair could be poised for a fresh bearish push. However, a downside move could be viewed as a technical correction rather than an outright change in medium-term momentum.

USD/CAD daily chart