Canadian Dollar: USD/CAD (CAD=X) calendar is busy this week

Canadian Dollar: USD/CAD (CAD=X) calendar is busy this week

Canadian Dollar: USD/CAD (CAD=X) calendar is busy this week

Dollar/CAD moved upwards last week, the fourth straight week that the pair has moved higher. Will the Canadian dollar continue to fall? The Canadian calendar is busy this week, with retail sales, CPI and GDP. Here are the highlights and an updated technical analysis for USD/CAD.

The C$ continues to lose ground, as greater risk apprehension has soured investors on riskier assets. This is a result of the ongoing U.S-China trade war. Although the sides are talking to each other, investors appear pessimistic that the sides can reach some agreement which would avoid further U.S tariffs on Chinese goods, which are set to take effect on March 1. The arrest of the CFO of Huawei by Canadian authorities and her possible extradition to the U.S. have triggered an angry Chinese response and threaten to derail the talks.

  • Foreign Securities Purchases: Monday, 13:30. An increase in the purchases of Canadian bonds and other assets by foreigners is bullish for the Canadian dollar. In October, purchases increased sharply to C$7.70 billion, crushing the estimate of C$0.30 billion.
  • Manufacturing Sales: Tuesday, 13:30. Manufacturing Sales rebounded in October with a gain of 0.2%, after a decline in September. The indicator is a key gauge of activity in the manufacturing sector.
  • CPI: Wednesday, 13:30.  CPI is the primary gauge of consumer inflation and should be treated as a market mover. After two straight declines, CPI posted a respectable gain of 0.3% in October.
  • Wholesale Sales: Thursday, 13:30. Sales at the wholesale level provide some guidance for the retail level. Sales have sagged, with a decline of 0.1% in September, followed by a decline of 0.5% in October. Will the negative streak end this week?
  • Core Retail Sales: Friday, 13:30. Core retail sales exclude the most volatile items which make up retail sales, thus making it a more reliable gauge of consumer spending. The indicator rebounded in October with a small gain of 0.1%, following a decline a month earlier.
  • GDP: Friday, 13:30. The Canadian economy posted a rare decline in September, dropping 0.1% m/m. The soft reading weighed on the Canadian dollar and was a factor in the BoC holding off from raising rates last week.
  • Retail Sales: Friday, 13:30. Since a sparkling gain of 2.0% in May, retail sales have struggled, as Canadian consumers continue to hold tight to the purse strings. There was some improvement in October, with a small gain of 0.2%, after a decline in September.
  • BoC Outlook Survey: Friday, 13:30. The quarterly survey provides a snapshot of the mood and level of optimism in the business sector. The survey looks at whether businesses are planning an increase in hiring, spending and investment, which provides a gauge of economic activity.

Overall, the bias in prices is: Upwards

By the way, prices are vulnerable to a correction towards 1.31.

The projected upper bound is: 1.35.

The projected lower bound is: 1.32.

The projected closing price is: 1.34.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 3 black candles for a net of 3 white candles. During the past 50 bars, there have been 28 white candles and 21 black candles for a net of 7 white candles.

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 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 62.3503. This is not an overbought or oversold reading. The last signal was a sell 22 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 60.75. 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 122 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 78. This is not a topping or bottoming area. The last signal was a sell 3 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 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.000 at 1.338. Volume was 100% below average (consolidating) and Bollinger Bands were 9% narrower than normal.

Open High Low Close Volume___
1.338 1.339 1.338 1.338 69

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.34 1.32 1.30
Volatility: 7 7 8
Volume: 78,080 88,444 88,135

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 2.7% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume into CAD= (mildly bullish). Our trend forecasting oscillators are currently bullish on CAD= and have had this outlook for the last 47 periods.

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