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USD/CAD Exchange Rate Prediction – The Dollar Rebounds on Rising Yields

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·1 min read
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Key Insights

  • The dollar rebounded against the Loonie.

  • Treasury yields moved higher, buoying the greenback.

  • Canadian trade data showed a narrower than expected surplus.

USD/CAD moved higher, rebounding back through former support. The 2-year yield rose helping to generate tailwinds for the greenback.

Canada reported a narrower than anticipated trade surplus of C$1.5 billion, down from a revised C$2.3 billion. A 14.3% decline led the decline in the surplus in crude oil exports in volumes, which were primarily offset by natural gas exports.

Technical Analysis

The USD/CAD rebounded after declining earlier in the week. Target support is seen near an upward sloping trend line near 1.2450. There is strong resistance near the 200-day moving average at 1.2657. The 10-day moving average crossed below the 50-day moving average, which means that a short-term downtrend is now in place.

Short-term momentum has reversed and turned positive as the fast stochastic had a crossover buy signal. Prices are oversold. The fast stochastic is printing a reading of 10, below the oversold trigger level of 20.

Medium-term momentum turns negative as the MACD line might generate a crossover sell signal.

This scenario happens when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day M.A. of the MACD line). The trajectory of the MACD is in positive territory, which reflects an upward trend in price movement.

 

This article was originally posted on FX Empire

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