Canadian Dollar: USD/CAD (CAD=X) – Panic Selling Pushes Canadian Dollar To New Lows
There’s panic in the markets today, and USD/CAD is no exception. As the U.S. Dollar Index raced through the important 100 level, the U.S. dollar gained a lot of ground against many currencies.
Even more importantly, the Canadian dollar suffered a fundamental blow due to the panic sell-off in oil. The coronavirus situation gets tougher day by day, and various countries implement tough measures to stop the spread of the disease.
As a result, forecasts for oil demand get worse on a daily basis. Goldman Sachs now estimates that the hit to demand could reach as much as 8 million bbl/day in late March. WTI oil currently trades below $24 per barrel, and my bet is that today the Canadian oil companies won’t bother to check quotes for Canadian oil benchmarks which trade at a substantial discount to WTI.
Adding fuel to the fire, U.S. President Trump has announced that the United States will temporarily close border with Canada to “non-essential traffic”. At this point, the fundamental outlook for the Canadian economy is rather grim, which contributes to the weakness of the Canadian dollar.
However, the biggest driver for the move in USD/CAD is the massive flight to safety that is happening in all world markets right now. The U.S. dollar is the primary recipient of investor money – other safe haven currencies like Swiss frank or Japanese yen are losing ground against the dollar.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1.36.
The projected upper bound is: 1.47.
The projected lower bound is: 1.43.
The projected closing price is: 1.45.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 34 white candles and 16 black candles for a net of 18 white candles.
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 83.3535. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 13 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 83.74. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 27 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 156.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 9 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 buy 15 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.004 at 1.446. Volume was 81% below average (consolidating) and Bollinger Bands were 402% wider than normal.
Open High Low Close Volume___
1.450 1.452 1.442 1.446 11,340
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.40 1.34 1.32
Volatility: 18 11 7
Volume: 104,626 67,862 65,078
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 9.3% 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 very strong flows of volume into CAD= (bullish). Our trend forecasting oscillators are currently bullish on CAD= and have had this outlook for the last 41 periods. Our momentum oscillator is currently indicating that CAD= is currently in an overbought condition.