The Canadian Dollar (CAD) surrendered some of its recent gains on Monday, trading mostly lower against its major peers. Light trading conditions prevailed as the market awaits key events later this week.

Focus Shifts to US Economic Data and Fed Policy

The economic calendar for Canada this week offers little to excite traders, with the focus firmly on the US. The Federal Reserve’s interest rate decision on Wednesday is the main event, with its potential impact on the US Dollar a major concern for the CAD. Additionally, US ADP Employment Change data, released on the same day, will provide a glimpse into the upcoming US Nonfarm Payrolls report on Friday.

Technical Analysis: CAD Pauses for Breath

The CAD traded flat against the USD on Monday, hovering near 1.3650. While the pair has retreated from last week’s highs near 1.3850, it remains above a near-term support zone between 1.3600 and 1.3550.

Despite the pullback, the long-term technical picture for USD/CAD leans bullish. The pair trades above its 200-day EMA at 1.3528, and the US Dollar is still up roughly 3% against the CAD year-to-date.