Canadian Dollar: USD/CAD (CAD=X) Rally Stalling

Canadian Dollar: USD/CAD (CAD=X) Rally Stalling

Canadian Dollar: USD/CAD (CAD=X) Rally Stalling

The Canadian dollar drifted higher steadily this week, but the rally seems to have stalled overnight.

USD/CAD was unable to extend losses below support in the $1.3240 area and inched higher overnight. Bank of Canada Governor Stephen Poloz was in Melbourne, Australia, attending a meeting of the Australia Canada Leadership forum. His remarks were not published on the BoC website, but he reportedly said that the Canadian economy “was in a good place.” He told the audience that the BoC must balance the risks of cutting interest rates in the event of a slowdown against increasing financial vulnerability risks. FX traders ignored the comments, preferring to focus on broad U.S. dollar sentiment.

Overnight, that sentiment was in risk-aversion mode. China announced a massive jump in the number of coronavirus cases and deaths, and traders got spooked. The bought the traditional safe-haven currencies, Swiss franc and Japanese yen, as well as gold while selling the commodity currency bloc. The increase in coronavirus (Covid-19) cases arose from a change in how the virus was diagnosed, giving doctors broader discretion. The earlier diagnosis is expected to reduce fatalities.

Technical Indicators

Overall, the bias in prices is: Sideways.

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

The projected upper bound is: 1.33.

The projected lower bound is: 1.32.

The projected closing price is: 1.33.

Candlesticks

A black body occurred (because prices closed lower 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 27 white candles and 23 black candles for a net of 4 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 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 28.5715. 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 59.87. 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 3 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 12. This is not a topping or bottoming area. The last signal was a sell 3 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed down -0.001 at 1.326. Volume was 92% below average (consolidating) and Bollinger Bands were 21% wider than normal.

Open     High      Low     Close     Volume___
1.327 1.327 1.326 1.326 4,358
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.33 1.31 1.32
Volatility: 3 4 5
Volume: 49,763 47,993 64,739

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 0.3% above its 200-period moving average and is in an upward trend. Volatility is 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 17 periods.

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