USD/CAD Exchange Rate Prediction – The Dollar Rises on Strong Data

The USD/CAD rallied on Tuesday following a stronger than expected factor order report. Despite the robust headline figure, U.S. yields eased. U.S. Household debt surged as the housing market continues to help consumers borrow capital to reverb their homes. The markets are eying Friday’s U.S. payroll report and bidding up the greenback ahead of the number.

Technical Analysis

The USD/CAD rose on Tuesday, pushing through resistance which is now support near the 10-day moving average at 1.2528. Support is seen near the 100-day moving average at 1.2366. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The movement of the fast stochastic from 12 to 21 reflects accelerating positive momentum from an oversold condition. Medium-term momentum is flat to negative as the MACD (moving average convergence divergence) histogram prints in the red with a rising trajectory which points to consolidation.

Durable Goods Order Rise

Factory orders rose 1.5% in June, compared to expectations of a climb of 1%. This advance follows a 2.3% increase in May. Orders soared 18.4% on a year-on-year basis. Orders for transportation equipment increased 2.0. Unfilled orders at factories increased 1.0% in June. Shipments advanced 1.6%. Inventories climbed 1.0% after increasing 1.1% in May. The inventories-to-shipments ratio slipped to 1.48 from 1.49 in May.