Canadian Dollar: USD/CAD (CAD=X) Canadian CPI Slips

Canadian Dollar: USD/CAD (CAD=X) Canadian CPI Slips

Canadian Dollar: USD/CAD (CAD=X) Canadian CPI Slips

USD/CAD continues to have a quiet week, as the pair remains rangebound. In Wednesday’s North American session, the pair is trading at 1.3271, up 0.22% on the day.

Canadian CPI Slips

Canada’s key inflation gauge, CPI, contracted by 0.1% in August. The reading of -0.1% marked a sharp drop from a 0.5% gain in July, but the markets had expected a decline of 0.2%. Weaker inflation means a decrease in economic activity, which could weigh on the Canadian currency.

Fed Poised to Lower Rates

The Federal Reserve has strongly hinted that further rate cuts are coming in the fourth quarter, and the Fed is widely expected to cut the benchmark rate at its monthly policy meeting later in the day. The CME Group is predicting a 70% chance of a 1/4 point rate cut. If the Fed does press the rate trigger, the Canadian dollar could take advantage as lower rates make the U.S. dollar less attractive to investors.

Technical Analysis

USD/CAD has remained rangebound this week. The line of 1.3282 remains relevant and is currently providing weak resistance. On Tuesday, the pair managed to test this line, although it failed to consolidate above it. USD/CAD could take another stab on Wednesday and test this line. On the downside, there is support at the round number of 1.3200.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.34.

The projected lower bound is: 1.32.

The projected closing price is: 1.33.

Candlesticks

A white body occurred (because prices closed higher 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 30 white candles and 20 black candles for a net of 10 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 70.5244. This is not an overbought or oversold reading. The last signal was a sell 1 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 55.21. 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 53 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 50. This is not a topping or bottoming area. The last signal was a buy 5 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.004 at 1.328. Volume was 2% below average (neutral) and Bollinger Bands were 13% narrower than normal.

Open     High      Low     Close     Volume___
1.324 1.331 1.324 1.328 72,703
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.32 1.32 1.33
Volatility: 6 5 6
Volume: 73,202 70,102 87,407

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 0.2% 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 8 periods.

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