Canadian Dollar: USD/CAD (CAD=X) has gyrated around back-to-back interest rate cuts from the Federal Reserve and Bank of Canada this week

Canadian Dollar: USD/CAD (CAD=X) has gyrated around back-to-back interest rate cuts from the Federal Reserve and Bank of Canada this week

Canadian Dollar: USD/CAD (CAD=X) has gyrated around back-to-back interest rate cuts from the Federal Reserve and Bank of Canada this week

The direction of USD/CAD has edged higher by more than 3% so far this year. Strength in the US Dollar relative to its Canadian Dollar counterpart since January can be broadly attributed to market impact from the ongoing coronavirus outbreak.

Spread of the novel coronavirus (COVID-19) over recent weeks has indirectly caused a selloff in oil prices and spurred demand for safe-haven currencies. Both of the aforementioned fundamental developments tend to be bullish for spot USD/CAD price action, but is there potential for the Greenback to keep climbing against the Loonie?

USD/CAD pierced the upper barrier of its bullish flag consolidation pattern last week and now looks to back-test the previously standing trendline of resistance. After breaching this technical obstacle, spot USD/CAD prices might target resistance posed by the May 2019 next before eyeing the December 2018 and May 2017 swing highs.

Technical Indicators

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.32.

The projected upper bound is: 1.35.

The projected lower bound is: 1.33.

The projected closing price is: 1.34.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 31 white candles and 19 black candles for a net of 12 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 55.8881. This is not an overbought or oversold reading. The last signal was a sell 3 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 64.21. 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 17 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 104.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 2 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 5 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.002 at 1.340. Volume was 10% above average (neutral) and Bollinger Bands were 1% narrower than normal.

Open     High      Low     Close     Volume___
1.338 1.343 1.338 1.340 60,415
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.33 1.32 1.32
Volatility: 6 5 5
Volume: 78,437 56,475 63,948

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 1.5% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. 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 31 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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