USD/CAD Exchange Rate Prediction – The Dollar Slides Despite Weak Canadian Manufacturing
The dollar eased versus the Loonie on Monday despite a broad rally against most major currencies. Softer than expected, Canadian Manufacturing data failed to derail the Loonie rally. U.S. yields rallied following a stronger than expected NY manufacturing survey. Despite robust inflation in the United States, the Canadian dollar continues to outperform.
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Technical analysis
The dollar moved lower on Monday, easing back to support near the 50-day moving average, 1.2534. Resistance is seen near the 10-day moving average at 1.2469. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. 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 Manufacturing Declined
Canadian manufacturing sales fell 3% $58.5 billion in September, driven by a decline in motor vehicle sales. Statistics Canada reported that sales of motor vehicles fell 35.6% to $1.9 billion, the lowest level since May 2020, while sales of motor vehicle parts dropped 13.5% to $1.8 billion. Total manufacturing sales in constant dollars fell 4.2% in September, indicating a lower volume of goods sold.