Yahoo Finance USD/CAD Exchange Rate Prediction – The Loonie Continues to Rally
The USD/CAD continued to edge lower following the U.S. CPI report and the Fed Meeting Minutes. U.S. yields were mixed with the 2-year rising and the 10-year falling. The U.S. CPI rose 0.4% for the month, compared with the 0.3% expected. Excluding food and energy, which are the more volatile components of the price index, CPI increased 0.2% on the month and 4% year over year, against respective estimates for 0.3% and 4%.
Technical Analysis
The dollar edged lower against the Loonie, after breaking through support which is an upward sloping trend line that comes in near 1.2550, which is now resistance. Additional resistance is seen near the 10-day moving average at 1.2620. The 10-day moving average has crossed below the 50-day moving average which means that a short-term downtrend is in place. Short-term momentum has reversed and turned negative the fast stochastic generated a crossover sell signal. Prices are oversold as the fast stochastic is printing a reading of 3 below the oversold trigger level of 20 which could foreshadow a correction, 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 lower trajectory which points to a lower exchange rate.
Fed Said They Could Soon Begin to Taper
According to minutes from the central bank’s September meeting released Wednesday, Federal Reserve officials signal that they could begin reducing their bond purchases as soon as mid-November. The Fed kept rates unchanged but indicated that the Fed soon might be ready to start curtailing the bond purchases during the post-meeting statement.
This article was originally posted on FX Empire
