USD/CAD Exchange Rate Prediction – The Dollar Rallies Ahead of the Fed

The dollar continued to rebound against the Loonie on Monday, testing resistance levels. The greenback’s strength comes despite lower Treasury yields. The Fed is scheduled to meet for a 2-day meeting this week. Expectations are for the Fed to accelerate the tapering of their bond purchase program. Also, this week the U.S. will release PPI and Retail Sales.

Technical analysis

The dollar traded higher against the Loonie.  The exchange rate pushed through short-term which is now support near the 10-day moving average at 1.2750.  Additional support is seen near the 50-day moving average at 1.2536.  Short-term momentum has turned positive the fast stochastic generated a crossover buy signal. Medium-term momentum has turned negative as 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 consolidation.

All Eyes are on the Fed

The Fed is scheduled to complete its’ two-day meeting on Wednesday. Expectations that the Fed will announce the accelerating of the tapering of its bond purchase program. Any surprise will likely be dovish as the Fed has been sidely bearish since October CPI.