USD/CAD as rising oil prices underpin the Loonie.
USD/CAD dips in volatile trading due to rising oil prices and robust Canadian data. The USD retreated, and benchmark yields fell several basis points. Investors are selling out of bonds due to rising inflation concerns and reduced economic growth prospects.
Despite the Fed’s hawkish monetary policy, gold prices traded flat as benchmark yields weakened. Oil prices moved higher due to a shortage in US oil inventories and tight supply from Russia and Libya. Less demand and rising inflation signal that stagflation will persist in the economy.
Existing home sales declined by 2.7% from March 2021 to the seasonally adjusted annual rate of 5.77 million units. March home sales were down 4.5% The readings were taken as mortgage rates began to rise in January and February before skyrocketing in March. Prices are rising because of the supply shortage of homes, which makes homes more expensive. This situation is making it difficult for homebuyers to purchase homes.
The USD/CAD witnessed aggressive selling today, drooping below the key psychological level of 1.25 after consolidating for three days. In the long term, elevated commodity prices will underpin the Loonie. Resistance is seen near the 10-day moving average of 1.26. Support is seen near the April 4th low near 1.247.
Short-term momentum turned negative as the fast stochastic had a crossover sell signal. Medium-term momentum is positive but decelerating as the MACD line generated a crossover buy 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 MA of the MACD line).
David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.