USD/CAD Exchange Rate Prediction – The Dollar Rebounds on Strong Claims Data
The USD/CAD rebounded on Thursday after hitting a 3-month low as the greenback rose against most major currencies. U.S. Treasury yields rose following a larger than expected decline in Jobless claims. Wednesday’s Stronger than expected Canadian CPI continues to buoy Canadian short-term yields.
The dollar rebounded on Thursday against the Loonie, but the downtrend remains intact. Resistance is seen near the 10-day moving average at 1.2404. Support is seen near the July lows at 1.2308. The 10-day moving average has crossed below the 50-day moving average, which means a short-term downtrend is in place. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Prices are no longer oversold as the fast stochastic is printing a reading of 24 above the oversold trigger level of 20. Medium-term momentum has turned negative the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD histogram is printing in negative territory with a lower trajectory which points to a lower exchange rate.
Jobless Claims Continue to Fall
Jobless claims totaled 290,000 for the week ended October 16, down 6,000 from the previous period. This was the second week in a row that claims ran below 300,000. Expectations were for a small increase to 300,000. Continuing claims also fell to their lowest level since the Covid-19 crisis began, dropping to 2.48 million, a decline of 122,000 from the previous week. The four-week moving average for initial claims totaled 319,750.