USD/CAD Exchange Rate – The Dollar Eases Following Wholesale Price Report

The USD/CAD edged higher as the greenback was mixed.  U.S. yields moved lower despite a mixed whole price index.  The market now seems convinced that the Fed will remain on hold until the Q3 of 2022. Additional inflation information will be released later in the week including the U.S. CPI.

Technical analysis

The dollar edged slightly higher on Tuesday. The exchange is trading above support near the 10-day moving average, 1.2400. Resistance is seen near the 50-day moving average at 1.2536. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Prices are overbought with the fast stochastic printing a reading of 83, above the overbought trigger level. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index is generated a crossover buy signal. This 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).

PPI Rise More than Expected

The Labor Department reported that producer prices rose 0.6% for the month, in line with expectations. The monthly pace was faster than the 0.5% increase in September. Excluding food and energy the PPI increased 0.4% month over month, slightly below the 0.5% estimate but an elevated pace from September’s 0.1% gain. One-third of the increase in goods prices came from soaring gasoline, with prices rising 6.7%. Beef and veal prices represented the other side of the ledger, posting a collective decline of 10.3%.