USD/CAD Exchange Rate Prediction – The Dollar Eases Following the ECB Decision

The USD/CAD declined on Thursday as the dollar dropped against most major currencies. The tone of the ECB meeting weighed on the greenback. European Central Bank President Christine Lagarde argued that to slow the pace of asset buying under the institution’s pandemic emergency program didn’t amount to tapering. This put pressure on the dollar. Jobless claims were stronger than expected buy this failed to buoy the greenback.

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 Surprises

Jobless claims fell to 310,000 last week. Continuing claims, which run a week behind the headline number, dropped as well, falling to 2.78 million, a decrease of 22,000 from the previous week. That also is the lowest level since March 14, 2020. The four-week moving average for continuing claims dropped to 2.84 million. Claims had been expected to total 335,000 for the week.