USD/CAD Exchange Rate Prediction – The Dollar Rallies to a 6-Week High
The dollar moved higher against the Loonie on Friday and finished the week up 0.8%. Yields moved lower on Friday as the market attempted to absorb who might have the best chance to be Fed Chair. Canadian retailers notched up a better than expected retail sales report.
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Technical analysis
The dollar moved higher and is poised to test trend line resistance near 1.28. Support is near the 50-day moving average, 1.2520. The 10-day moving average cross above the 50-day moving average, which means that a short-term uptrend is almost in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The exchange rate is overbought with the fast stochastic printing a reading of 96, above the overbought trigger level of 80. 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).
Canadian Retail Sales Rose
According to Statistics Canada, October retail sales rose 1%, offsetting a 0.6% drop in September. The decline in September was smaller than the 1.9% contraction initially estimated by the statistics agency last month. For the third quarter, retail sales rose 2.7%, the most significant quarterly increase in a year. Excluding price gains, quarterly sales were up 1.5%.