USD/CAD Exchange Rate Prediction – The Dollar Ease on Soft Sentiment

The dollar eased on Friday after surging higher on Thursday against Loonie as strong inflation data throughout the week buoyed the greenback. Jobs data was also robust, as the Labor Department reported that in the United States, the total number of quits rose by 164,000 in September to a record-high 4.4 million.

Technical analysis

The dollar moved lower on Friday easing back to support near the 50-day moving average, 1.2534. Resistance is seen near a downward sloping trend line that comes in near 1.28.  Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought with the fast stochastic printing a reading of 84, above the overbought trigger level. Medium-term momentum has turned 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 Dropped Sharply

U.S. consumer sentiment plunged in early November to the lowest level in a decade. The University of Michigan’s Consumer Sentiment Index plunged to 66.8 in its preliminary November reading from October’s final reading of 71.7. That was the lowest level since November 2011 and was far short of the median estimate of 72.