USD/CAD Exchange Rate Prediction – The Loonie Continues to Advance

The dollar dropped sharply on Tuesday versus the Loonie. The move comes despite a ramp-up in U.S. Treasury benchmarks. Unit labor costs in the U.S. continue to increase, hitting a 28-year year over year high. The U.S. trade deficit narrowed to $67.1 billion in October, the lowest in six months

Technical analysis

The dollar moved lower against the Loonie for the second consecutive trading session.  Resistance is former support near the 10-day moving average at 1.2748.  Support is seen near the 50-day moving average at 1.2537.  Short-term momentum has turned negative 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. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

U.S. Trade Deficit Narrows

After hitting a record high in September, the U.S. trade deficit narrowed to $67.1 billion in October, the lowest in six months. A big rebound in exports helped to offset a much smaller rise in imports. The October deficit was 17.6% below the all-time peak in September of $81.4 billion, the Commerce Department reported Tuesday. It was the smallest monthly deficit since April’s $66.2 billion imbalance.