Canadian Dollar: USD/CAD (CAD=X) Awaiting BOC
The Canadian dollar see-sawed in a reasonably narrow trading range overnight. USD/CAD drifted between $1.3321 and $1.3367 as traders focused on global stock market price action. The G-7 are reportedly preparing a response to the coronavirus outbreak. Comments by various central bank chiefs, including the U.S. Federal Reserve Chair Jerome Powell and Bank of Japan’s Haruhiko Kuroda, fueled speculation of a coordinated G-7 interest rate cut.
Their comments sparked a massive rally on Wall Street. The Dow Jones Industrial Average (DJIA) jumped 5.1%, followed by the S&P 500, up 4.6% and NASDAQ, enjoying 4.5% gains.
However, a Reuters article disputed that notion. It claimed a “source” said the draft communique did not include a specific call for new government or coordinated interest rate cuts.
The Canadian dollar and the euro were the only currencies to have lost ground against the greenback by today’s Toronto open. The loonie underperformance is due to the heightened expectations that the Bank of Canada will cut interest rates tomorrow. The Indigenous blockade of railways and concerns about the coronavirus impact on domestic growth may force the BoC’s hand and lead to a 0.25% rate cut.
There are not any actionable U.S. or Canadian economic reports on tap today. Traders will continue to track equity price action and await news from the G-7.
Technical Indicators
Overall, the bias in prices is: Upwards.
By the way, prices are vulnerable to a correction towards 1.32.
The projected upper bound is: 1.35.
The projected lower bound is: 1.33.
The projected closing price is: 1.34.
The projected closing price is: 1.34.
Candlesticks
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.
Momentum Indicators
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
Stochastic Oscillator
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 44.7273. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 62.29. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 16 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 95. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.
MACD
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 4 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.000 at 1.338. Volume was 98% below average (consolidating) and Bollinger Bands were 10% narrower than normal.
Open High Low Close Volume___
1.338 1.339 1.337 1.338 1,143
Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.32 1.32
Volatility: 7 5 5
Volume: 69,784 54,097 63,656
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
Summary
FOREX CAD= is currently 1.3% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of CAD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on CAD= and have had this outlook for the last 30 periods.
