Canadian Dollar: USD/CAD (CAD=X) dollar is in demand Supported by Oil

Canadian Dollar: USD/CAD (CAD=X) dollar is in demand Supported by Oil

Canadian Dollar: USD/CAD (CAD=X) dollar is in demand Supported by Oil

The Canadian dollar is in demand. A steep rally in West Texas Intermediate (WTI) oil prices since the end of August has contributed to the positive bias in the domestic currency.

Yesterday, Saudi Arabia’s new oil minister suggested that the Organization of the Petroleum Exporting Countries and Russia oil production caps would continue.

That news, combined with a more positive tone to U.S./China trade talks, improved the global growth outlook, and led to the buying of “riskier assets.”

The Canadian dollar continues to benefit from Friday’s U.S. and Canadian employment reports. U.S. non-farm payrolls were lower than predicted, which triggered U.S. dollar selling on the assumption that encouraged a more aggressive Fed easing policy. The Canadian employment report beat expectations which some analysts believe makes it harder for the Bank of Canada to justify a rate cut in October.

FX market sentiment turned positive after the U.S. and China said that face-to-face-trade negotiations would occur in October. Recent Chinese economic reports suggest the U.S. tariffs are taking a toll on the economy. Yesterday, China reported that its trade surplus narrowed sharply and that exports fell 1.0% in August. Overnight, the Chinese data was mixed. Inflation was a tad higher but blamed on special factors while Producer Prices fell, but a tad less than expected.

Technical Indicators

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

A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 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.

Three black candles occurred in the last three days. Although these candles were not big enough to create three black crows, the steady downward pattern is bearish.

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 11.2262. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 31 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 37.16. 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 48 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 -128.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -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 sell 12 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed down -0.001 at 1.314. Volume was 90% below average (consolidating) and Bollinger Bands were 1% narrower than normal.

Open     High      Low     Close     Volume___
1.315 1.315 1.314 1.314 7,277
Technical Outlook 
Short Term: Oversold
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.32 1.32 1.33
Volatility: 5 5 6
Volume: 59,080 67,560 87,334

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 1.2% below 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 3 periods.

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