USD/CAD Exchange Rate Prediction – The Dollar Rebounds on Stronger Yields

The dollar finally moved higher rebounding slightly versus the Loonie. The greenback’s strength comes ahead of Friday’s consumer price index release. Expectations are for a 6.7% year over year increase. Jobless claims fell to a 50-year low, which shows continued strength in the U.S. jobs market.

Technical analysis

The dollar traded higher against the Loonie.  Resistance is former support near the 10-day moving average at 1.2748.  Support is seen near the 50-day moving average at 1.2534.  Short-term momentum has reserves and turned positive 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. The MACD histogram is printing in negative territory with a declining trajectory which points to lower prices.

U.S. Employment Data is Strong

The four-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 21,250 to 218,750, the lowest level since March of 2020. Continuing claims rose 38,000 to 1.992 million in the week ended November 27. Jobless claims tumbled 43,000 to 184,000 for the week ended December 4, the lowest level since September 1969.