USD/CAD Exchange Rate Prediction – The Canadian Dollar Strengthens Following Robust Employment Report
The USD/CAD eased on Friday as the Canadian dollar gained traction in the wake of the best-than-expected employment report. The dollar lower against most major currencies, despite a rally in U.S. Treasury yields. The Canadian economy added 230,700 jobs in June as restrictions to slow the pandemic were rolled back across the country. After rallying by more than 17% since March of 2020, the Canadian dollar is finally finding a bottom as the greenback continues to gain traction.
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Technical Analysis
The USD/CAD eased on Friday, pulling back toward support near an upward sloping trend line that comes in near 1.2430 and the 10-day moving average at 1.2402. Target resistance is seen near the April highs at 1.2657. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal. The current reading on the fast stochastic is 54, down from 84, which reflects decelerating positive momentum. Medium-term momentum remains positive as the MACD (moving average convergence divergence) histogram prints in positive territory with an upward sloping trajectory which points to a higher exchange rate.
Canadian Jobs Grow More than Expected
According to Statistics Canada, the Canadian economy added 230,700 jobs in June. Canada added more jobs than expected in June, bringing employment within 1.8% of pre-pandemic levels. The unemployment rate was 7.8%, just short of expectations of 7.7%. The gain in jobs came as the number of part-time positions rose 263,900, bringing it back to pre-pandemic levels, while the number of full-time jobs fell 33,200.