The US economy rebounded strongly in the third quarter amid a shrinking trade deficit, but the data overstates the health of the economy as domestic demand was the weakest in two years due to aggressive interest rate hikes by the Federal Reserve. Thursday's preliminary third-quarter gross domestic product report from the Commerce Department also showed residential investment contracted for the sixth straight quarter, the longest stretch of contraction since the housing market collapsed in 2006 as the sector struggled under the weight of soaring mortgage rates.
Daily chart of USD/CAD USDCAD:
The daily chart shows that the short-term exchange rate has rebounded slightly, MACD runs on the 0 axis but the volume can continue to shrink to near the 0 axis, RSI continues to fall, and it is expected that the short-term exchange rate will have a high probability to further decline after the rebound.
Long-short turning point :1.3650
Resistance: 1.3850 1.4050
Support: 1.3450 1.3250
Trading strategy: Bearish below 1.3450, target 1.3450, 1.3250
Alternative: Bullish above 1.3550 with 1.3850, 1.4050 targets