The USD/CAD edged slightly higher on Monday following gains seen in the loonie on Friday following a stronger than expected Canadian employment report. Later this week, on Wednesday, the Bank of Canada meets to determine monetary policy. The better than expected 230k increase in employment last Friday was seen as sufficient to allow the central bank to continue with its tapering its bond purchase program.
The USD/CAD rebounded slightly on Monday after, pulling back toward support near an upward sloping trend line that comes in near 1.2430 and the 10-day moving average at 1.2425. Target resistance is seen near the April highs at 1.2657. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 54, down from 84, which reflects decelerating positive momentum. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to a higher exchange rate.
Robust Inflation Fails to Buoy the Greenback
On Tuesday, the U.S. Labor Department is expected to release the Consumer Price Index. The inflation rate is expected to show a 5% year-over-year gain, which would be the highest since August 2008. The core CPI is projected to rise 4%. The June Survey of Consumer Expectations showed that median inflation expectations over the next 12 months jumped to 4.8%, a 0.8 percentage point rise from May and the highest reading in history for a series that goes back to 2013.
This article was originally posted on FX Empire
More From FXEMPIRE:
Silver Price Forecast – Silver Markets Continue Consolidation
EOS, Stellar’s Lumen, and Tron’s TRX – Daily Analysis – July 13th, 2021
Silver Price Prediction – Prices Rise Ahead of CPI
Natural Gas Price Prediction – Prices Rise and Settle at Contract High
Crude Oil Price Forecast – Crude Oil Markets Continue to Test Recent Highs
Real estate, insurance stocks push FTSE 100 higher; Admiral jumps