USD/CAD Exchange Rate Prediction – The Dollar Slips on Soft Sentiment
The dollar edged lower against the Loonie following weaker than expected import prices and soft U.S. sentiment. Strong costs for shipping drove input costs higher which bleed into Thursday’s PPI report, but the sentiment seemed to be sliding, which weighed on treasury bonds.
The USD/CAD edged lower and trading in a very tight range with support seen near the 10-day moving average at 1.2515. Resistance on the currency pair is seen near the 200-day moving average at 1.2567. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is accelerating as the MACD (moving average convergence divergence) histogram is printing in negative territory with a declining trajectory, which points to lower prices.
Sentiment is Sliding
The consumer sentiment index tumbled to 70.2 in its preliminary August reading. That figure is down more than 13% from July’s result of 81.2 and below the April 2020 mark of 71.8 that was the lowest of the pandemic era. Separately, on Friday, the government released U.S. import prices which increased less than expected in July. Import prices rose 0.3% last month after jumping 1.1% in June. Expectations were for import prices, to increase by 0.6%.