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Canadian Dollar: USD/CAD (CAD=X) Recoups Some Losses

Canadian Dollar: USD/CAD (CAD=X) Recoups Some Losses

The Canadian dollar closed Friday’s session with a small loss compared to its opening level. It was not alone. The rest of the G-10 major currency pairs suffered a similar fate, led by slides in EUR/USD and GBP/USD. Canadian dollar weakness was exacerbated by Retail Sales data exacerbated the Canadian dollar weakness. The results met expectations but were a tad soft.

The Canadian dollar was also on the defensive because of somewhat contradicting speeches by Bank of Canada Governor Stephen Poloz and Deputy Governor Carolyn Wilkins. On Tuesday, Ms Wilkins delivered a dovish statement. She spoke of downside economic risks and said the with the overnight rate at 1.75%; the BoC had plenty of room to cut interest rates. Two days later, Poloz suggested that the BoC wasn’t in any hurry to change its policy stance. He said, “We think we’ve got monetary conditions about right given the situation.”

FX activity will be lighter than usual this week because of the U.S. Thanksgiving holiday on Thursday. It is the biggest American holiday of the year, and many market participants will get as early a start to the festivities as they can. There isn’t a whole lot of actionable data on tap either. Canada Q3 GDP growth is due Friday. A significant deviation from the 0.2% m/m September gain could spark a sharp move in the Canadian dollar, because of the holiday-thinned markets.

Canada Wholesale Trade and Chicago Fed National Activity Index are due today.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.34.

The projected lower bound is: 1.32.

The projected closing price is: 1.33.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 26 white candles and 23 black candles for a net of 3 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 78.2506. This is not an overbought or oversold reading. The last signal was a sell 1 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 64.04. 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 101 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 123.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 6 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 17 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.000 at 1.330. Volume was 44% below average (neutral) and Bollinger Bands were 7% wider than normal.

Open     High      Low     Close     Volume___
1.330 1.332 1.328 1.330 39,022
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.33 1.32 1.33
Volatility: 4 5 6
Volume: 57,167 67,396 81,434

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 0.2% above 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 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 9 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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