USD/CAD Exchange Rate Prediction – The Dollar Eases Despite Robust Housing Data
The dollar eased as riskier assets gained traction. On Monday, Canadians went to the polls and re-elected Prime Minister Trudeau for a 3rd consecutive PM tenor. U.S. yields moved south for a second straight trading session despite a stronger than expected U.S. Housing Starts report. The debt ceiling will likely keep the dollar buoyed as riskier assets remain under pressure for the balance of September.
Technical Analysis
The dollar eased against the Loonie on turnaround Tuesday. The exchange rate hit resistance near an upward sloping trend line that comes in near 1.2910, on Monday and that still remains a target. Support on the exchange rate is seen near the 10-day moving average at 1.2705 and the 50-day moving average at 1.2607. The exchange moved from the overbought territory as the fast stochastic generated a crossover sell signal. Medium-term momentum is positive as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a rising trajectory which points to a higher exchange rate.
U.S. Home Building Accelerates
U.S. Homebuilding accelerated more than expected in August, likely boosted by declining lumber prices. According to the U.S. Commerce Department, Housing starts advanced 3.9% to an annual rate of 1.615 million units in August. Expectations had been for housing starts rebounding to a rate of 1.555 million units. The prior month’s housing data for July was revised up to a rate of 1.554 million units from the previously reported 1.534 million units.
This article was originally posted on FX Empire
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