USD/CAD Exchange Rate Prediction – The Dollar Rebounds on Solid Import Prices

The USD/CAD found a footing after declining sharply earlier in the trading session. AS U.S. Treasury yields rallied following a stronger than expected retail sales report, and higher import prices, the greenback gained a toe hold.

Technical Analysis

The dollar gained against the Loonie, but remains in a downtrend despite closing higher than it opened on Friday. Resistance is seen near the 10-day moving average at 1.2490. Support is seen near the July lows at1.2308 The 10-day moving average has crossed below the 50-day moving average which means that a short-term downtrend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are oversold as the fast stochastic is printing a reading of 12 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 lower trajectory which points to a lower exchange rate.

U.S. Import Prices Gain

Import prices rose 0.4% last month after falling 0.3% in August. In the 12 months through September, prices shot up 9.2% after advancing 8.9% in August. Expectations had been for import prices, which exclude tariffs, to increase by 0.6%. Imported fuel prices increased 3.7% last month after declining 3.0% in August. Petroleum prices rebounded 3.9%, while the cost of imported food accelerated 1.3%.