Canadian Dollar: USD/CAD (CAD=X) Can Fall Further
The US Dollar has had a rough October, with the Dollar Basket (DXY) falling from 99.67 to 97.66 at the time of writing. The persistent bearishness has pressured DXY to test the 200-day moving average around 97.40 and should the basket break beneath support, it could open the door to further losses for the greenback. In turn, such a development could translate to further gains for the Canadian Dollar.
USD/CAD PRICE FORECAST
The Canadian Dollar has been on a tear amidst the recent bout of USD weakness, as USD/CAD has slipped from resistance at 1.3350 to support at 1.3075 in October to date. Now, grasping to confluent support around the current trading price, continued Dollar weakness could pave the way for further CAD gains – given that support around 1.3020 can be taken out.
In July, the area offered robust support and effectively stalled the pair’s 2-month decline. Therefore, another test of the zone could allow for bears to breakthrough and open the door for deeper losses – offering an attractive risk-reward profile. An area of invalidation for this trade resides roughly around September’s swing low at 1.3145
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.32.
The projected upper bound is: 1.32.
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 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 25 white candles and 25 black 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 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 13.0175. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 13 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 31.44. 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 80 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 -96. This is not a topping or bottoming area. The last signal was a buy 0 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 sell 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.001 at 1.307. Volume was 99% below average (consolidating) and Bollinger Bands were 55% wider than normal.
Open High Low Close Volume___
1.307 1.307 1.306 1.307 452
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.32 1.33
Volatility: 4 5 6
Volume: 57,061 66,413 85,384
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 1.6% 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 moderate flows of volume out of CAD= (mildly bearish). Our trend forecasting oscillators are currently bearish on CAD= and have had this outlook for the last 7 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.