USD/CAD Exchange Rate Prediction – The Dollar Whipsaws as Treasury Yields Rise

The dollar whipsawed versus the Loonie on Tuesday after rallying on Monday. U.S. long-term yields rose sharply, pushing the yield differential in favor of the greenback. The U.S. released its Jobs Openings and Labor Turnover report on Tuesday which showed a record quit rate. Later in the week, the U.S. will also release its jobs data. Expectations are for a 400K increase in new jobs.

Technical Analysis

The USD/CAD moved lower on Tuesday. Resistance is seen near the 10-day moving average at 1.2765. Support is seen near the 50-day moving average at 1.2661. Short-term momentum has turned positive as 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. This scenario 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). The MACD histogram is printing in negative territory with a downward sloping trajectory which points to a lower exchange rate.

JOLTS Shows Quit Rate Rises

The number of job openings totaled 10.56 million, lower than the 11 million estimates and a decline from 11.09 million in October. The job openings rate was 6.6%, down from about 7% in October but well ahead of the 4.5% from the prior year. The quits level surged to 4.53 million for the month. That represented an 8.9% increase from October and broke September’s high-water mark of 4.36 million.