USD/CAD Exchange Rate Prediction – The Dollar Rose Following GDP Report

The USD/CAD moved higher as yield rose following a stronger than expected U.S. GDP report.. The dollar was broadly higher against most major currencies. All eyes are on Fed Chair Jerome Powell and his speech in Jackson Hole, Wyoming on Friday. Jobless claims moved slightly higher but the jump was smaller than expected.

Technical Analysis

The USD/CAD rallied on Thursday ahead of the Fed speech. Support is seen near the 200-day moving average at 1.2545. Resistance is seen near the August highs 1.2949. Short-term momentum has turned positive the fast stochastic generated a crossover buy signal. Medium-term upward momentum has turned negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. This situation occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line).

GDP Rise More than Expected

GDP rose at a revised 6.6% annualized pace in Q2. Originally the increase was put at 6.5%. The slight increase in GDP reflected somewhat stronger consumer spending and U.S. exports than initially reported. The revised GDP report also included the first look at corporate profits in the second quarter. Unemployment claims edged up to 353,000 last week from a revised 349,000 a week earlier. The four-week moving average fell to 366,500 last week, a new pandemic low.