Canadian Dollar: USD/CAD (CAD=X) Cautious Tone in Market Amid Dovish Crude Oil Price

Canadian Dollar: USD/CAD (CAD=X) Cautious Tone in Market Amid Dovish Crude Oil Price

Canadian Dollar: USD/CAD (CAD=X) Cautious Tone in Market Amid Dovish Crude Oil Price

Cautious Tone in Market Amid Dovish Crude Oil Price Limits Sharp Move on Either Side

Adding to this, a modest rebound in crude oil prices extended some additional support to the commodity-linked currency – Loonie and further collaborated to the pair’s weaker tone through the Asian session on Wednesday. Despite a combination of negative forces, the downside seemed limited as traders might be reluctant to place any aggressive bets ahead of today’s key data/event risk from Canada and the US. The FOMC is scheduled to announce its latest monetary policy decision later in the day and will also release updated economic projections, which will play an important role in driving the greenback in the near-term. As of writing this article, USD/CAD pair is trading at 1.3455 down by 0.07% on the day.

Ahead of the highly anticipated event, Canadian economic docket highlights the release of consumer inflation figures for November and influence the pair’s momentum during the early North-American session. When looking from technical perspective, any meaningful up-move now seems to confront resistance near the 1.3485 region, above which the pair is likely to surpass the 1.3500 handle and test the 1.3535-40 supply zone. On the flip side, the 1.3425-20 region now seems to protect the immediate downside and is closely followed by the 1.3400 handle, which if broken might accelerate the slide further towards the 1.3350-40 support area.

Overall, the bias in prices is: Upwards

By the way, prices are vulnerable to a correction towards 1.32.

The projected upper bound is: 1.36.

The projected lower bound is: 1.34.

The projected closing price is: 1.35.

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 29 white candles and 20 black candles for a net of 9 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 87.6682. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 24 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 68.20. 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 124 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 142.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 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 10 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.003 at 1.349. Volume was 9% below average (neutral) and Bollinger Bands were 15% wider than normal.

Open High Low Close Volume___
1.346 1.349 1.341 1.349 78,736

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

Moving Averages: 10-period 50-period 200-period
Close: 1.34 1.32 1.30
Volatility: 6 7 8
Volume: 82,800 89,694 88,247

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 3.5% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 49 periods.

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