USD/CAD Exchange Rate Prediction – The Loonie Rise on Strong Retail Sales
Key Insights
The dollar eased against the Loonie.
Treasury yields slipped.
Canadian Retail Sales rose more than expected.
USD/CAD eased as the greenback failed near resistance. Stronger than expected Canadian Retail Sales and weaker than expected U.S. Existing Home Sales allowed the Loonie to gain traction. U.S. yields could have peaked with the market pricing in a 95% chance of a 75-basis point rate hike in July.
Statistics Canada reported that Canadian retail sales rose 0.9% to $60.7 billion in April, boosted by gains at general merchandise stores. Expectations were for a 0.8% rise. Core retail sales rose 1.0% compared to expectations they would rise by 0.6%. Sales at general merchandise stores gained 4.2%, while sales at miscellaneous store retailers rose 11.3%.
Technical Analysis
The USD/CAD slid. Target resistance is seen near the June highs at 1.3076. Support is seen near the 10-day moving average of 1.2865. The 10-day moving average crossed above the 50-day moving average, which means that a short-term uptrend is now in place.
Short-term momentum has reversed and turned negative as the fast stochastic had a crossover sell signal. Prices have moved out of the oversold territory, reflecting negative momentum.
Medium-term momentum is positive but decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a sliding trajectory that points to consolidation.
This article was originally posted on FX Empire
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