The USD/CAD eased on Friday but closed higher by 1.25% for the week. This followed the prior week’s 2.5% decline. U.S. Treasury yields moved higher buoying the yield differential in favor of the greenback. Sentiment rose in June but less than expected as inflation rose to the highest level in decades.
The USD/CAD traded sideway, bouncing at bouncing 1.25% for the week. Support is seen near the 10-day moving average at 1.2299. Resistance is seen near the former breakout trend line near 1.2364. Additional resistance is seen near the 100-day moving average at 1.2407. 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 is neutral as the fast stochastic moved sideways and downward on top of the signal line The RSI also moved sideways reflecting consolidation. Medium-term momentum is positive but decelerating. The MACD (moving average convergence divergence) histogram is printing in positive territory with a declining trajectory which points to consolidation.
Consumer Sentiment Slipped as Inflation Rose
According to the University of Michigan, the index of consumer sentiment was 85.5 in June, down from the mid-month flash estimate of 86.4, but above the 82.9 reading in May. The indicator missed expectations which was forecast to show that the consumer sentiment index would rise to 86.5. Additionally, the Commerce Department reported that the Personal Consumption Expenditures came in at 3.4% year over year. Including volatile food and energy prices, the PCE index rose 3.9% the year over year.
This article was originally posted on FX Empire
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