USD/CAD’s rally stalled on perplexed US dollar

The USD/CAD pair finished Friday’s session with gains, though it hesitated to go past the 1.3400 mark. The pair is trading at 1.3393 at the time of writing.

The USD/CAD prolonged its weekly losses and tumbled for the fourth consecutive week, losing 0.36%, but on the day, the USD/CAD is up 0.22%. After the University of Michigan (UoM) Consumer Sentiment release showed that sentiment improved, it weighed on the US Dollar (USD). Therefore, the USD/CAD is trading at 1.3393, below its opening price by 0.37%.

Once the USD/CAD dropped below the 100-day Exponential Moving Average (EMA) at 1.3425, it was the seller’s excuse to drag the exchange rate below the 1.3400 mark.

The US economic docket featured the Consumer Sentiment, revealed by a poll of the University of Michigan, showed an improvement, exceeding estimates of 60.5, hitting 64.6. Delving into the report, inflation expectations by US consumers were mixed, reduced in the near term, while uptick to 3% from 2.9% for a five-year period.

Inflation is easing in the US, with markets taking that as a sign that the Fed will be able to pause, and that as the economy starts to react to the monetary tightening put into place, the Fed will cut rates in the second half of the year

The Relative Strength Index (RSI) is still in bearish territory, suggesting that sellers are in charge. The Rate of Change (RoC) shows sellers are gathering momentum, as they outweighed buyers in Friday’s session, though it wasn’t enough to keep the pair in the green territory.