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USD/CAD Exchange Rate Prediction – The Dollar Eased Against the Loonie

By:
David Becker
Updated: Sep 27, 2021, 18:23 UTC

yields rise

USD/CAD Exchange Rate Prediction – The Dollar Eased Against the Loonie

The dollar eased against the Loonie on Monday testing support levels. Despite higher U.S. Treasury yields, the greenback was unable to gain traction. The yield differential is moving in favor of the U.S. currency, but it has difficulty making headway. Stronger than expected U.S. Durable goods orders lifted U.S. yields but along with the dollar against most major currencies.

Technical Analysis

The dollar eased against the Loonie testing support near the 50-day moving average at 1.2611. Resistant is seen near the 10-day moving average at 1.2707. The exchange moved from the overbought territory as the fast stochastic generated a crossover sell signal. Prices are oversold with the fast stochastic printing a reading of 11, below the oversold trigger level of 20 which could foreshadow a correction. Medium-term momentum has turned negative the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.

Durable goods orders rose 1.8% to $263.5 billion in August as compared with July, the Commerce Department reported which was the biggest increase since May. Economists expected durable goods orders to rise by 0.7%. Transportation equipment, up three of the last four months, helped boost the increase in August. That category was up 5.5% from July. New orders for nondefense capital goods excluding aircraft, so-called core capital-goods, a closely watched proxy for business investment, were up 0.5% in August compared with the previous month.

About the Author

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.

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