Canadian Dollar: USD/CAD (CAD=X) economic data has been mixed

Canadian Dollar: USD/CAD (CAD=X) economic data has been mixed

Canadian Dollar: USD/CAD (CAD=X) economic data has been mixed

USD/CAD had an uneventful week until Friday, when a soft GDP release out of Canada sent the pair sharply higher.Traders should keep an eye on the Bank of Canada rate announcement and employment data. As well, the annual budget could impact on the pair’s movement. Here is an outlook for the highlights of this week and an updated technical analysis for USD/CAD.

Canadian inflation fell to a 15-month low in January, with a 1.4% gain on an annualized basis. Gas prices have fallen for six successive months, dragging on inflation. Canada’s GDP in December declined 0.1%, missing the estimate of 0.0%. This marked a second straight decline and the third in three months. The weak economic data means that the BoC policymakers are unlikely to raise interest rates in the next few months.

Over in the U.S., Advance GDP, which was released a month late due to the government slowdown, showed a gain of 2.6% in Q4. Although this was weaker than the 3.4% gain in Q3, it was well above the estimate of 2.2%. The better than expected reading can be credited to strong consumer spending and business investment. The U.S. economy continues to perform well, with a strong expansion of 3.1% in 2018. Even with the strong GDP release, however, it’s unlikely that the Federal Reserve will veer from it dovish stance.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.33.

The projected upper bound is: 1.34.

The projected lower bound is: 1.31.

The projected closing price is: 1.33.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 5 black candles for a net of 1 black candles. During the past 50 bars, there have been 25 white candles and 24 black candles for a net of 1 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 61.2901. This is not an overbought or oversold reading. The last signal was a buy 6 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 55.65. 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 42 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 53. This is not a topping or bottoming area. The last signal was a buy 1 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.013 at 1.329. Volume was 34% above average (neutral) and Bollinger Bands were 30% narrower than normal.

Open High Low Close Volume___
1.317 1.331 1.313 1.329 125,622

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

Moving Averages: 10-period 50-period 200-period
Close: 1.32 1.33 1.32
Volatility: 8 8 8
Volume: 112,266 97,616 89,789

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 1.0% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of CAD= at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bullish on CAD= and have had this outlook for the last 9 periods.

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