The Canadian Dollar (CAD) remained largely unchanged on Thursday, navigating choppy waters as mixed US economic data failed to spark significant momentum. While Canada’s economic calendar was quiet, traders are keeping a close eye on Friday’s Canadian Gross Domestic Product (GDP) report for April, a critical indicator for the loonie’s outlook.

Mixed US Data Fuels Market Uncertainty

A series of US economic releases on Thursday painted a conflicting picture:

• Durable Goods Orders: Contracted more than expected in May, signaling a potential slowdown in manufacturing activity.
• Q1 GDP: Confirmed initial estimates, showing a modest 1.4% growth.
• Initial Jobless Claims: Came in lower than anticipated, indicating a resilient labor market.
• Core PCE Preview: Ticked upwards to 3.7% in Q1, exceeding expectations and raising concerns about persistent inflation.

This mixed bag of data has contributed to a cautious market sentiment, with investors holding back on significant moves ahead of Friday’s critical releases.

Focus Shifts to Canadian GDP and US PCE Inflation

While Friday’s Canadian GDP data is expected to reveal a rebound to 0.3% growth in May, the spotlight is firmly on the US Personal Consumption Expenditure (PCE) Price Index, the Federal Reserve’s preferred inflation gauge. This data will be crucial for assessing the Fed’s future monetary policy trajectory.

Technical Analysis: USD/CAD Stalls, Bullish Potential Remains

The USD/CAD pair is trading near the 1.3700 handle, struggling to break above the 200-hour Exponential Moving Average (EMA). However, the pair has found support at the 50-day EMA, suggesting a potential bullish bounce. The overall technical picture remains unclear, with traders closely monitoring the upcoming data releases for further direction.