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USD/CAD Exchange Rate Prediction – The Loonie Sliped on Softer September Retail Sales

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The USD/CAD rebounded on Friday after hitting a 3-month low earlier in the week. U.S. Treasury yields rose and outpaced the gains seen in Canadian short-term yields despite a better than expected Canadian retail sales report.

Technical Analysis

The dollar rebounded on Friday against the Loonie, but the downtrend remains intact. Resistance is seen near the 10-day moving average at 1.2390. Support is seen near the July lows at 1.2308. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are no longer oversold as the fast stochastic is printing a reading of 24 above the oversold trigger level of 20. Medium-term momentum is negative as the MACD histogram is printing in negative territory, but the historical trajectory is rising, which points to consolidation.

Canadian Retail Sales Rise

In August, Canadian retail sales rose 2.1% to $57.2 billion, boosted by gains at food and beverage stores. Expectations were for a 2% increase. According to Statistics Canada, their September estimate shows that retail sales might have declined by 1.9%. Excluding gasoline stations and motor vehicle and parts dealers, Canadian retail sales gained 2.7% compared to expectations that the core would rise by 2.5%.

This article was originally posted on FX Empire

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