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USD/CAD Exchange Rate Prediction – The Dollar Rises as Momentum Turns Positive

·1 min read

The USD/CAD moved higher as the dollar gained against most major currencies. The move in the dollar comes as yields in Canada edge lower versus Treasury yields. Sentiment in the United States was stronger than expected, as reported by the University of Michigan sentiment index. The U.S. Chicago PMI was also stronger than expected while pending home sales dipped.

Technical Analysis

The dollar gained traction and rallied on Friday. The exchange rebounded through resistance at the 10-day moving average, which is now support at 1.2360. Resistance is seen near the 50-day moving average at 1.2573. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term momentum is about to turn positive as the MACD (moving average convergence divergence) index is generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Sentiment Rose More than Expected

The University of Michigan’s final reading of the consumer sentiment index was 71.7 in October, up from the mid-month flash estimate of 71.4 but below the 72.8 reading in September, data released Friday showed. Expectations were for the index to come in at 71.2.

This article was originally posted on FX Empire

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