The Canadian Dollar plummets along with the USD following manufacturing PMI figures.

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The Canadian Dollar (CAD) is broadly lower on Monday after Canada’s S&P Global Manufacturing Purchasing Managers’ Index (PMI) figures for May disappointed expectations. A similar outcome in the US ISM Manufacturing PMIs has left the Canadian Dollar and the US Dollar (USD) struggling for second place.

Canada has seen 13 months of manufacturing PMI surveys below the key 50.0 level as industry leaders continue to deal with a declining Canadian economy. CAD traders will also be watching for the Bank of Canada (BoC) rate decision on Wednesday, with markets increasingly leaning towards the hope of a rate cut by the Canadian central bank. According to a recent Reuters poll, 22 out of 29 economists surveyed expect a 25 basis point rate cut by the BoC on June 5.

Technical Analysis: The Canadian Dollar stumbles on Monday despite USD/CAD pausing

The Canadian Dollar (CAD) is broadly lower on Monday, losing ground across the board and struggling to hold its own against the US Dollar. The CAD has fallen three-quarters of a percentage point against the Japanese Yen (JPY) and the Swiss Franc (CHF). A weakened US Dollar will have to settle for second place on Monday as the declining US Dollar struggles to catch up to the weakened CAD.

USD/CAD once again fell into a familiar demand zone near the 1.3600 level, but firmer Dollar bids keep the pair near 1.3660. The pair has been in a difficult consolidation pattern since early May, but highs are descending as CAD strength seems destined to fade further.

A long-term technical floor remains valued at the 200-day exponential moving average (EMA) near 1.3560, and USD/CAD seems trapped in congestion at the 50-day EMA near 1.3645. An upward move will see the pair dealing with 2024 peak bids near 1.3850.