USD/CAD Exchange Rate Prediction – The Dollar Breaks Out

The dollar surged higher and continued to rally against the Loonie in the wake of Wednesday’s stronger-than-expected inflation data. Jobs data was also robust, with Jobless claims hitting a pre-pandemic low.  The bond market in the U.S. was close in observance of the Veterans Day Holiday.

Technical analysis

The dollar moved higher Thursday surging through resistance which is now support near the 50-day moving average, 1.2884. Resistance is seen near a downward sloping trend line that comes in near 1.28.  Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are overbought with the fast stochastic printing a reading of 94, above the overbought trigger level. Medium-term momentum has turned positive as the MACD (moving average convergence divergence) index is generated a crossover buy signal. This occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Yields Took a Breather

Despite a rebound in the greenback as the markets were closed for the Veteran Day Holiday. Employment data continue to. Jobless claims fell to a new pandemic low of 267,000 last week as the job market recovers from last year’s sharp coronavirus downturn. Jobless claims fell by 4,000 last week, the Labor Department reported Wednesday. The four-week average of claims, dropped by nearly 7,300 to 278,000, also a pandemic low.