USD/CAD Exchange Rate Prediction – The Dollar Slips Despite Rally in Treasuries

The USD/CAD edged slightly higher but settled well off the highs of the trading session. Prices are retracing and are poised to test the 200-day moving average. The dollar was broadly lower against most major currencies. Durable goods orders came in better than expected while business spending was flat. All eyes are on Fed Chair Jerome Powell and his speech in Jackson Hole, Wyoming on Friday.

Technical Analysis

The USD/CAD edged slightly higher after retracing most of last week’s gains. The greenback continued to remain weaker against most major currencies. Support is seen near the 200-day moving average at 1.2550. Resistance is seen near the 10-day moving average at 1.2636. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term upward momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

Durable Goods Orders Fall

Durable goods orders decreased 0.1% to $257.2 billion in July month over month according to the Commerce Department Expectations were for a decline of 0.5%.  The increased 0.8% in June from the prior month, unchanged from the initial estimate for the month. Demand for durable goods has increased in 13 of the past 15 months. Business spending was flat in July.  New orders for nondefense capital goods excluding aircraft a proxy for business investment were unchanged in July compared with the previous month.