The trend is pointing to a stronger Loonie
USD/CAD moved lower breaking down through trend line support. The 10-year Treasury reversed course after closing above 3% on Monday. The decline in yields weighed on the greenback.
The U.S. Commerce reported that the trade gap in goods and services fell to 19.1% in April from the prior month to $87.1 billion, retreating from March’s record $107.7 billion deficit. Imports fell 3.4% to $339.7 billion, the first month-on-month decline since July last year. Exports continued their upward trend in recent months, rising 3.5% to $252.6 billion.
The USD/CAD broke lower, pushing through trend line support. Target support is seen near an upward sloping trend line that comes in 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 turned negative as the fast stochastic had a crossover sell signal. Prices are oversold. The fast stochastic is printing a reading of 0, 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.
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.