USD/CAD Exchange Rate Prediction – The Dollar Rise as Yields Surge
The dollar moved higher on Friday as the Loonie declined as both countries reported employment information. According to Statistics Canada, the country added 94,000 jobs in July. Expectations were for Canada to add more than 100,000 jobs. The unemployment rate fell to its lowest level since March of this year, at 7.5% in July compared with 7.8% in June.
The USD/CAD moved higher but failed to recapture resistance seen near the 20-day moving average at 1.2548. Support is seen near the 50-day moving average at 1.2379. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in negative territory with decelerating trajectory which points to consolidation.
The Unemployment Rate Drops to a Pandemic Level Low
Wages in the U.S. are on the rise, which is helping to buoy U.S. yields and the dollar. According to the Labor Department, average hourly earnings rose more than expected, rising 0.4% in July and are up 4% from the same period a year ago.U.S. Non-farm payrolls rose more than expected. The unemployment rate dropped to 5.4% as non-farm payrolls rose more than expected. The drop in the headline unemployment rate looked even more vital considering that the labor force participation rate ticked up to 61.7%.