USD/CAD Exchange Rate Prediction – The Dollar Eases Despite Robust Claims Data

The dollar eased against the loonie on Thursday but gained traction against most other major currencies. U.S. yields were mostly lower, weighing on the greenback, which slipped through trend line support.

Technical Analysis

The USD/CAD moved lower on Thursday, slipping to support. Resistance is seen near former support, an upward sloping trend line that comes in near 1.2797. Support is seen near the 50-day moving average at 1.2635. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. Medium-term momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This scenario 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). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to a lower exchange rate.

The Weekly Average of Jobless Claims Drops to a 50-year Low

The four-week moving average for claims came to 199,250, the lowest level since October 25, 1969. Jobless claims declined last week and remained close to their lowest level in more than 50 years. Jobless claims for the week ended December 25 totaled 198,000, less than the 205,000 expected and a reduction of 8,000 from the previous period.