Canadian Dollar: USD/CAD (CAD=X) content to hug the sidelines along with most of the G-10 major currencies
The Canadian dollar started the week quietly, content to hug the sidelines along with most of the G-10 major currencies.There were plenty of geopolitical worries along with the seemingly never-ending Brexit story and concerns around the upcoming European Central Bank meeting on Thursday.
U.K./Iran tensions were at the forefront.Iranian Revolutionary Guards seized a U.K. oil tanker in the Strait of Hormuz in retaliation for the U.K.’s seizure of an Iranian vessel a few weeks ago.British MP’s are still discussing their options.West Texas Intermediate oil prices soared to $56.86/barrel from Friday’s closing price of $55.73/b.
The upside move ran into resistance due to ongoing concerns that the U.S./China trade war will reduce global crude demand.Goldman Sachs analysts think so — they lowered their forecast for global demand to 1.27 billion barrels per day from 1.45 b/pd.
The Canadian dollar was underpinned by the oil price surge, and USD/CAD fell to $1.3043 from $1.3067.The Canadian dollar is stuck in a USD/CAD 1.3000-1.3100 trading band.Friday’s weaker-than-expected May Retail Sales report led to USD/CAD testing 1.3090, but it failed to extend gains higher, and prices quickly retreated.
The price swing was due to analysis suggesting the Retail Sales report wasn’t as negative as the headline numbers implied and because the April result was revised higher.
The U.S. and China may be moving closer to another round of face-to-face trade talks.China is discussing ways to increase its imports of U.S. soybeans.President Trump also bolstered sentiment.
He said “Secretary Mnuchin did have a call with the Chinese counterpart. They had a very good talk.”However, traders have learned to discount Trump’s bombast.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.32.
The projected lower bound is: 1.30.
The projected closing price is: 1.31.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 23 white candles and 27 black candles for a net of 4 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.
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 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 82.3900. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 47.99. 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 12 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 144.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a buy 5 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 10 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed up 0.000 at 1.312. Volume was 97% below average (consolidating) and Bollinger Bands were 46% narrower than normal.
Open High Low Close Volume___
1.312 1.313 1.311 1.312 2,439
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.33 1.33
Volatility: 5 6 7
Volume: 56,104 74,688 90,977
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 low 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 35 periods. Our momentum oscillator has set a new 14-period high while the security price has not. This is a bullish divergence.