USD/CAD Exchange Rate Prediction – The Dollar Rallies as Treasury Yields Rise
Key Insights
- The dollar rebounded sharply against the Loonie.
- Treasury yields broke out.
- Jobless claims were weaker than expected.
USD/CAD moved higher, rebounding and are poised to target resistance. The 2-year yield rose to help to generate tailwinds for the greenback. The currency markets are focusing on Friday’s U.S. CPI report following Thursday’s weaker than expected initial jobless claims report.
Jobless claims for the week ended June 4 totaled 229,000, an increase of 27,000 more than the 210,000 expected. Continuing claims, which run a week behind the headline number, were unchanged at just over 1.3 million, below estimates of 1.35 million. The four-week moving average for continuing claims declined slightly to 1.32 million, the lowest level since January 10, 1970.
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Technical Analysis
The USD/CAD rebounded sharply. Target resistance is seen near the 50-day moving average near 1.2720. Support is seen near an upward sloping trend line near 1.26. The 10-day moving average crossed below the 50-day moving average, which means that a short-term downtrend is now in place.
Short-term momentum has reversed and turned positive as the fast stochastic had a crossover buy signal.
Medium-term momentum decelerated. The trajectory of the MACD line is negative which points to consolidation.