Canadian Dollar: USD/CAD (CAD=X) grinding higher

Canadian Dollar: USD/CAD (CAD=X) grinding higher

Canadian Dollar: USD/CAD (CAD=X) grinding higher

People want the Canadian dollar. The local currency was the only G-10 major to gain between yesterday’s Toronto close and this morning’s open. Oil prices have a lot to do with the move as do the quick unwinding of short Canadian dollar positions after short-term technicals turned bullish for the Canadian dollar. 

The Canadian dollar has been grinding higher since last Thursday, coinciding with higher oil prices. West Texas Intermediate climbed to $56.40 U.S./barrel overnight. Prices continue to be underpinned by rising hopes that China and the U.S. will reach a trade agreement. Those hopes got added justification yesterday when President Trump told reporters that the trade talks were going well and implied that he would be willing to extend the March 1 deadline for a tariff increase to 25%. In an interesting twist, Bloomberg reported the U.S. asked China not to devalue its currency, which contributed to a drop in USD/CNY. 

The Canadian dollar may have got a small lift from GBP/CAD selling. The British pound soared yesterday ahead of Prime Minister Theresa May’s meeting with European Commission President Jean-Claude Juncker. Traders were hoping that she would be able to secure some concessions on the Irish border backstop issue. GBP/USD peaked at $1.3075 in Europe before plunging to $1.3027 on news that three Conservative MPs quit to join a new party. Those defections further weakened her minority government. 

Overall, the bias in prices is: Sideways.

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

The projected upper bound is: 1.33.

The projected lower bound is: 1.30.

The projected closing price is: 1.32.

Candlesticks

A black body occurred (because prices closed lower than they opened).
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 27 white candles and 21 black candles for a net of 6 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 13.9959. This is an oversold reading. However, a signal is not generated until the Oscillator crosses above 20 The last signal was a sell 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 40.76. 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 35 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 -54. This is not a topping or bottoming area. The last signal was a buy 11 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 9 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed down -0.005 at 1.315. Volume was 20% above average (neutral) and Bollinger Bands were 19% narrower than normal.

Open High Low Close Volume___
1.321 1.322 1.315 1.315 109,938

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

Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.33 1.31
Volatility: 7 7 8
Volume: 105,763 92,267 88,853

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 0.0% 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 2 periods.

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