Canadian Dollar: USD/CAD (CAD=X) continues to ignore domestic developments
Federal Finance Minister Bill Morneau taxed his brain and concluded that the coronavirus would have a significant impact on the Canadian economy. He told a Calgary audience, “I do want to acknowledge that the virus is undoubtedly going to have an economic impact.” He went on to say “We know the impact is real. It’s going to be felt across the country but perhaps even more so here in the oil and gas sector.”
Cynics might suggest that the Finance Minister was attempting to use the tragedy of the coronavirus outbreak to mask his government’s incompetence around the energy file. He bragged about the progress on the Trans-Mountain pipeline and how it is creating benefits for indigenous peoples. He didn’t say anything about the report that the cost to complete the project jumped 68% to $12.6 billion.
The Canadian dollar continued to ignore domestic developments and tracked broad U.S. dollar sentiment. That sentiment shifted slightly with the greenback giving back a small part of yesterday’s gains. Asia equity indexes closed on a mixed note. The Hong Kong and Shanghai indexes rose, while Japanese markets were shuttered for holidays. European equity indexes made new record highs and U.S. futures suggest another positive opening for Wall Street.
The only concern is how U.S. Federal Reserve Chairman Jerome Powell will answer coronavirus questions during his congressional testimony today and tomorrow. The text of the Fed’s Monetary Policy Report was released earlier. It echoed the outlook from the December and January Federal Open Market Committee meetings.
The U.S. dollar opened on a mixed note this morning, after closing with gains across the board yesterday.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.32.
The projected upper bound is: 1.34.
The projected lower bound is: 1.32.
The projected closing price is: 1.33.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 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 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 51.9418. 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 66.27. 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 1 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 56. This is not a topping or bottoming area. The last signal was a sell 1 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 24 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed up 0.000 at 1.329. Volume was 96% below average (consolidating) and Bollinger Bands were 44% wider than normal.
Open High Low Close Volume___
1.328 1.329 1.328 1.329 2,034
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.31 1.32
Volatility: 3 4 5
Volume: 50,553 47,611 65,130
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 0.5% above its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 15 periods.