Canadian Dollar: USD/CAD (CAD=X) likely to stay in a consolidation phase
Despite the subdued trading action on Monday amid the Columbus Day holiday in the United States (US) and the Thanksgiving Day holiday in Canada, the USD/CAD pair inched higher on Monday as the sharp drop witnessed in crude oil prices weighed on the commodity-related Loonie. As of writing, the pair was trading at 1.3227, adding 0.24% on a daily basis.
Crude oil turns south on Monday
Heightened geopolitical tensions in the Middle East and the uncertainty surrounding the “phase one” trade deal that the US reached with China on Friday caused crude oil prices to start the week under heavy selling pressure.
After gaining more than $2 in the second half of the week, the barrel of West Texas Intermediate (WTI) erased almost all of last week’s gains and was last seen trading at $52.90, down 3.4% on the day.
Commenting on the trade war developments, “there is a five-week period for the two sides to write down exactly what they agreed to in the meeting. This raises questions about how much “progress” has really been made,” said ING analysts. “We think there are probably some important disagreements on the terms of a deal, which could include the yuan mechanism.”
On the other hand, the poor performance of major European currencies at the start of the week allows the Greenback to find demand and help the pair cling to its daily gains. The US Dollar Index, which tracks the USD’s value against a basket of six major currencies, is looking to finish the day with modest gains near the 98.50 handle.
Overall, the bias in prices is: Sideways.
The projected upper bound is: 1.33.
The projected lower bound is: 1.31.
The projected closing price is: 1.32.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 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.
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.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 28.6780. This is not an overbought or oversold reading. The last signal was a sell 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 44.96. 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 72 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 -82. This is not a topping or bottoming area. The last signal was a buy 0 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 2 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.001 at 1.322. Volume was 100% below average (consolidating) and Bollinger Bands were 37% narrower than normal.
Open High Low Close Volume___
1.323 1.324 1.322 1.322 58
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.33 1.33
Volatility: 7 6 6
Volume: 59,465 68,679 86,338
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.
FOREX CAD= is currently 0.4% below its 200-period moving average and is in an upward trend. Volatility is relatively normal 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 8 periods.