USD/CAD Exchange Rate Prediction – The Greenback Pulls Back

The dollar whipsawed against the Loonie on Monday following last week’s drop in the greenback. U.S. yields were mixed as the 2-year continued to climb, and the yield curve flattened. European markets were closed on Monday due to the celebration of Boxing Day. The week is shortened at the tail end as most markets are close in observance of the New Year’s day holiday at the end of the week.

Technical Analysis

The USD/CAD whipsaw is moving sideways and lower. Support is seen near an upward sloping trend line that comes in near 1.2780. Resistance on the USD/Cad is seen near the 10-day moving average at 1.2850. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory which points a lower exchange rate.