USD/CAD Exchange Rate Prediction – The Dollar Edge Higher on Strong Jobs Data

The dollar attempted to move higher versus the Loonie but could not gain traction. U.S. Treasury yields moved higher following a more robust than expected U.S. private payroll report which lifted yield differential in favor of the greenback. The Fed minutes showed a hawkish crew, and the market is now expected a U.S. rate hike by March.

Technical Analysis

The USD/CAD moved higher on Wednesday. Resistance is seen near the 10-day moving average at 1.2753. Support is seen near the 50-day moving average at 1.2668. Short-term momentum has turned positive as the fast stochastic generated a crossover buy 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.

Strong Jobs Growth Lifts Yields

ADP and Macro-Economic Advisors released stronger than expected private job growth increased by 807,000 for December. Expectations were that private job growth would increase by 375,000 in December. The November total was revised lower from the initially reported 534,000. Hiring was broad-based, though leisure and hospitality led with 246,000 new positions. Trade, transportation and utilities contributed 138,000, professional and business services increased by 130,000.