USD/CAD Exchange Rate Prediction – The Loonie Rises on Wider Trade Balance

The  Loonie gained traction on Thursday following a strong than expected trade balance. The dollar moved sideways to lower against most major currencies despite stronger than expected continuing jobless claims. According to the Labor Department, first-time filings dipped to 385,000 for the week ended July 31, a decline of 14,000 from the previous week.

Technical Analysis

The USD/CAD moved Thursday. The exchange rate moved back through support which is now resistant at the 10-day moving average at 1.2525. Target resistance is seen near the July highs at 1.2807. Short-term momentum is negative as the fast stochastic generated a crossover sell signal. Medium-term negative momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in negative territory with a rising trajectory which points to consolidation.

Canada’s Trade Surplus Widens

Canada’s trade surplus swung to a huge surplus in June as exports surged while imports shrank. Statistics Canada reported Thursday that exports surged by 8.7% to $53.8 billion. Energy led the way with exports rising by 22%to $11.3 billion. That’s the largest amount since March of 2019. Cars and car parts were also up, by 14.9%. All in all, Canada exported $4.3 billion more goods and services to the world in June.