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USD/CAD Exchange Rate Prediction – The Dollar Rise on Risk-off Trade

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·1-min read
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The dollar surged higher and hit key resistance levels as Canada went to the polls on Monday. Riskier assets headed south which has benefited the greenback as a safe-haven currency. Prime Minister Trudeau and his Conservative challenger O’Toole appear to be running neck and neck.

Technical Analysis

The dollar moved higher against the Loonie, as the safe-haven lure of the greenback pushed the U.S. currency higher against most major currencies. The exchange rate hit resistance near an upward sloping trend line that comes in near 1.2910. Support on the exchange rate is seen near the 10-day moving average at 1.2690 and the 50-day moving average at 1.2600. The exchange rate is overbought as the fast stochastic is printing a reading of 81, above the overbought trigger level of 80, which could foreshadow a correction. Short-term momentum has turned negative 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.

The Debt Ceiling Generates Risk

Congress has been stalling any movement related to future spending despite urging from Treasury Secretary Yellen to act. There are rumors that The House of Representation may take up a stop-gap measure to extend expenditures, but this attempted will have difficulty in the Senate.

This article was originally posted on FX Empire

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