USD/CAD Exchange Rate Prediction – The Dollar Falls on Weak GDP Print

The USD/CAD moved lower and the dollar dropped against most major currencies. The ECB kept rates unchanged, helping to buoy the Euro. GDP was less than expected helping to take some of the lusters off U.S. yields. This was offset by a stronger than expected U.S. Jobless Claims report.

Technical Analysis

The Loonie continued to trend higher. The exchange rate slipped below support now resistance at the 10-day moving average at 1.2357.  Additional support is seen near the July lows at 1.2308. Resistance is seen near the 50-day moving average at 1.2573. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. This flip-flopping of buy and sell signals generally reflects consolidation. Prices are oversold. The fast stochastic is printing a reading of 17, below the oversold trigger level of 20. Medium-term momentum is about to turn positive as the MACD (moving average convergence divergence) index is poised to generate a crossover buy signal. This 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).

GDP Rises Less than Expected

According to the Commerce department’s first estimate released Thursday, gross domestic product grew at a 2.0% annualized pace in the third quarter. Expectations had been for GDP to increase by a 2.8% reading. That marked the slowest GDP gain since the 31.2% plunge in the second quarter of 2020.