USD/CAD Exchange Rate Prediction – The Loonie Gains Traction Following Greenback Surge

The dollar reversed course and took a breather against the Loonie but held up better against most major currencies. The move comes despite a stronger than expected Chicago PMI which was released on the last trading day of the month ahead of Friday’s ISM national manufacturing report. U.S. yields were mixed, but continue to trend higher.

Technical Analysis

The dollar eased against the Loonie, reversing back through support which is now resistance seen near the 10-day moving average at 1.2718. Additional resistance is seen near the September highs at 1.2896. Support is seen near the 50-day moving average at 1.2618. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. 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 rising trajectory which points to a higher exchange rate.

Mid-West Purchasing Managers Reports Beats Expectations

Chicago PMI, which reflects industrial utilization in the middle of the United States, slipped in September to its lowest level in seven months. The Chicago purchasing managers index slowed to 64.7 in September from 66.8 in the prior month but was better than expected. The index has been moderating from a record high of 75.2 in May. Expectations were for a reading of 64.3 in September.