Canadian Dollar: USD/CAD (CAD=X) Rallies with Oil Prices

Canadian Dollar: USD/CAD (CAD=X) Rallies with Oil Prices

Canadian Dollar: USD/CAD (CAD=X) Rallies with Oil Prices

The Canadian dollar gapped higher in Asia when oil prices surged upwards. West Texas Intermediate jumped to $63.15 U.S./barrel after closing on Friday at $54.83/b after news that drone attacks on Saudi Arabian oil fields knocked over 50% of the Kingdom’s oil production offline. There isn’t any word when production will resume. The U.S. blamed Iran for being behind the attacks, and President Trump announced that America was “locked and loaded.” He also authorized the release of oil from the U.S. Strategic Petroleum Reserves which helped prices to ease.

The Canadian dollar rallied. USD/CAD dropped from $1.3287 at Friday’s Toronto close to $1.3210 at the Asia open. Prices drifted higher during the European session and started trading in Toronto, just above the mid-point of the overnight range. External developments will be the major driver of Canadian dollar moves this week, leaving domestic data to muddy the waters. Canada Manufacturing Sales, Inflation and Retail Sales reports are due Tuesday, Wednesday and Friday, respectively.

Weaker-than-expected Chinese data and comments from the Chinese premier may have exacerbated global recession fears. China August Retail Sales, (Actual 7.5% y/y vs forecast 7.9% y/y and July 7.6%y/y) and Industrial Production, (Actual 4.4% y/y vs forecast 5.2%) missed their forecasts, underscoring the negative impact from U.S. tariffs. Chinese Premier Li Keqiang warned that the economy was facing downward pressure and that it “is difficult” for their economy to grow at 6%. The news weighed on the New Zealand dollar.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.34.

The projected lower bound is: 1.31.

The projected closing price is: 1.32.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 white candles.

A long upper shadow occurred. This is typically a bearish signal (particularly when it occurs near a high price level, at resistance level, or when the security is overbought).

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 76.5962. This is not an overbought or oversold reading. The last signal was a sell 0 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 49.85. 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 52 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 -2. This is not a topping or bottoming area. The last signal was a buy 4 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 sell 16 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.000 at 1.324. Volume was 96% below average (consolidating) and Bollinger Bands were 12% narrower than normal.

Open     High      Low     Close     Volume___
1.324 1.325 1.323 1.324 3,012
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.32 1.32 1.33
Volatility: 7 5 6
Volume: 64,825 68,398 87,060

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 0.5% below its 200-period moving average and is in an downward 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 bearish on CAD= and have had this outlook for the last 7 periods.

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