USD/CAD Exchange Rate Prediction – The Dollar Edge Higher Bearly

Key Insights

• The dollar edged higher versus the Loonie.

• Treasury yields moved lower.

• The exchange rate settled just off the lows.

USD/CAD edged higher but traded in a tight range. The dollar was mostly lower against most major currencies as Treasury yields declined to pull the interest rate differential in favor of the Loonie. Fed Chair Powell was on the hill on Wednesday and will have a repeat performance Thursday.

Powell told Congress that he believes the economy is strong now, but he acknowledged a recession could happen. He added that achieving a “soft landing,” in which policy tightens without severe economic circumstances such as a recession, will be difficult. Powell insisted that inflation is running too hot and needs to come down.

Technical Analysis

The USD/CAD rebounded but close well off the highs of the day. Target resistance is seen near the June highs at 1.3076. Support is seen near the 10-day moving average of 1.2900. 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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