USD/CAD Exchange Rate Prediction – The Loonie Gains on Strong Employment Report
The loonie was buoy on Friday following a stronger than expected Canadian employment report. The dollar was stronger versus most other major currencies in the wake of a stronger than expected wholesale inflation report. U.S. yields moved higher helping the greenback gain traction but not against the Canadian dollar.
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Technical Analysis
The USD/CAD eased but remains above support near the 10-day moving average at 1.2602. Additional support is seen near the 50-day moving average at 1.2559. Short-term momentum has turned positive. The fast stochastic generated a crossover buy signal in oversold territory. Medium-term negative momentum has decelerated as the MACD (moving average convergence divergence) index generated is poised to generate a crossover buy signal. This situation 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).
Jobs Data in Canada is Strong
Canada’s economy finished August by adding 90,200 jobs the third consecutive monthly increase that brought the country as close as it has been to recouping historic employment losses last year. The unemployment rate fell to 7.1% for the month, compared with 7.5% in July, bringing the rate to the lowest level since the onset of the pandemic last year.