Canadian Dollar: USD/CAD (CAD=X) Bank Of Canada’s (BoC) Anticipated Decision In Focus
The Canadian Dollar is being supported by various global and domestic factors, but investors have also been hesitant to move too much on the currency amid anticipation for major data and Bank of Canada (BoC) news next week.
Illustrating the Canadian Dollar’s resilience despite a lack of data is its exchange rates versus the British Pound (GBP) and US Dollar (USD).
Sterling was unable to sustain a recovery in GBP/CAD due in part to the Canadian Dollar’s lasting strength. GBP/CAD slipped after opening the week at 1.7051 and still trended below the week’s opening levels on Friday.
Meanwhile, USD/CAD also slipped slightly and was trending lower than the week’s opening levels of 1.3054 on Friday.
Canadian Dollar Exchange Rates Review: Bank of Canada (BoC) Hopes Keep CAD Appealing
The Bank of Canada (BoC) remains one of the few major central banks to have avoided taking a dovish stance or cutting Canadian interest rates in recent years.
Even as other major central banks like the Bank of England (BoE) and Federal Reserve now see fresh rate cut speculation, the BoC continues to signal that it is not planning any imminent rate cuts.
This resilient BoC stance continued to find support last week, as Canada’s December job market results beat expectations.
While the Canadian economic calendar was relatively quiet for the remainder of the week, the Canadian Dollar did find some support in strong oil prices and global trade hopes.
Oil is Canada’s most lucrative commodity and the Canadian Dollar is a trade correlated currency. This means that higher oil prices, as well as news that the US-China ‘phase one’ trade deal had finally been reached, both supported CAD in the past week.
The Canadian Dollar was able to more easily gain against the Pound, as rising Bank of England (BoE) interest rate cut bets weakened Sterling.
USD/CAD movement was a little more volatile though. The US Dollar was jittery as US-China trade news had a mixed impact on the US economic outlook. US data has also been mixed throughout the week, overall making it more difficult for CAD to push USD lower.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.31.
The projected upper bound is: 1.31.
The projected lower bound is: 1.30.
The projected closing price is: 1.31.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 21 white candles and 28 black candles for a net of 7 black candles.
An inverted hammer occurred. If this occurs during a downtrend (which appears to be the case with FOREX CAD=) it implies a reversal. Look for a confirmation of the reversal on the bar.
A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).
A shooting star occurred (a shooting star has a small real body near the bottom of the candle and a long upper shadow). During an uptrend the long upper shadow indicates that the bears are gaining control and a top may occur.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 51.2823. This is not an overbought or oversold reading. The last signal was a buy 11 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 45.99. 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 buy 9 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 74. This is not a topping or bottoming area. The last signal was a buy 9 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 7 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.001 at 1.306. Volume was 100% below average (consolidating) and Bollinger Bands were 9% narrower than normal.
Open High Low Close Volume___
1.306 1.307 1.306 1.306 187
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.30 1.32 1.32
Volatility: 3 4 5
Volume: 48,903 47,476 67,675
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.
FOREX CAD= is currently 1.3% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of CAD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on CAD= and have had this outlook for the last 26 periods.
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