Canadian Dollar: USD/CAD (CAD=X) direction will be governed by broad U.S. dollar moves

Canadian Dollar: USD/CAD (CAD=X) direction will be governed by broad U.S. dollar moves

Canadian Dollar: USD/CAD (CAD=X) direction will be governed by broad U.S. dollar moves

The Canadian dollar inched higher overnight. It may be a busy week, but the Canadian dollar’s direction will be governed by broad U.S. dollar moves, at least until the end of the week. On Friday, Canada Retail Sales and Consumer Price Index reports are released. They will be under scrutiny because the Bank of Canada said that policy decisions are data-dependent.

Canada June CPI is expected to rise 2.5%, y/y well above the 2.5% recorded in May. More importantly, Core CPI is forecast at 1.4% vs 1.3% rise in May. Retail sales data is expected be flat (.0%) which is an improvement over April’s 1.2% decline. If these reports surprise to the upside, markets will boost the odds for a September rate hike. The Canadian dollar will rally as a result.

North American Free Trade Agreement uncertainty continues to be a huge drag on Canadian dollar gains. The Mexican election is over. which suggests that new trilateral talks will begin. Canadian dollar moves will be subject to positive or negative headlines about the talks.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.33.

The projected lower bound is: 1.30.

The projected closing price is: 1.31.

Candlesticks

During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 31 white candles and 18 black candles for a net of 13 white candles.

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 52.2292. This is not an overbought or oversold reading. The last signal was a buy 5 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 50.86. 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 13 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 -37. 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 sell 12 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.000 at 1.314. Volume was 95% below average (consolidating) and Bollinger Bands were 22% narrower than normal.

Open High Low Close Volume___
1.314 1.314 1.313 1.314 4,380

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.30 1.28
Volatility: 6 9 9
Volume: 72,311 87,642 82,485

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 2.8% above its 200-period moving average and is in an downward 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 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 5 periods.

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