USD/CAD Exchange Rate Prediction – The Dollar Rallies Despite Mixed Claims Data
The dollar moved higher but closed well off the session highs as the dollar eases against most major currencies. U.S. Unemployment claims continue to decline, but the mixed data put downward pressure on yields. Canada’s Prime Minister Trudeau is visiting Washington today for North America’s Leaders Summit. The plan calls for tax breaks for electric cars made in the U.S., which puts Canada at a disadvantage.
The dollar moved higher and is poised to test trend line resistance near 1.28. Support is near the 50-day moving average, 1.2520. The 10-day moving average is poised to cross above the 50-day moving average, which means that a short-term uptrend is almost in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. The exchange rate is overbought with the fast stochastic printing a reading of 87, above the overbought trigger level of 80. 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).
U.S. Jobs Data is Nuetral
According to the Bureau of Labor Statistics, U.S. jobless claims declined to 268,000. Expectations were for claims to fall to 260,000. The total was the lowest since the beginning of the pandemic. The four-week moving average declined to 272,750. Continuing claims, which counts the number of individuals accepting claims for 2-weeks or more, declined by 129,000 to 2.08 million, a pandemic-era low dating back to March 14, 2020.