Canadian Dollar: USD/CAD (CAD=X) releases GDP

Canadian Dollar: USD/CAD (CAD=X) releases GDP

Canadian Dollar: USD/CAD (CAD=X) releases GDP

The Canadian dollar is up slightly on Thursday. Currently, the pair is trading at 1.3423, up 0.08%. On the release front, there are no Canadian events. In the U.S., Final GDP for the fourth quarter posted a 2.2% gain, shy of the estimate of 2.4%. Unemployment claims fell to 211 thousand, easily beating the estimate of 221 thousand. On Friday, Canada releases GDP, while the U.S. will publish consumer spending and inflation data.

Canadian bonds showed an inverted yield curve on Monday, after U.S. treasury bonds showed the same pattern on Friday. This has spooked investors, as the inverted yield curve is a sign of a recession. The Bank of Canada is already in a dovish stance and could follow the Fed and freeze rates for the rest of the year. If the economic slowdown continues, policymakers may have to consider a rate cut in order to stimulate the economy.

Global trade tensions have weighed on inflation levels in the developed economies, and the U.S. is no exception. However, with the Fed saying it will put a hold on rates until 2020, could that change? At the Fed policy meeting, policymakers lowered their inflation forecast for 2020, citing weakness in the Chinese and European economies. However, the chief economist of Credit Suisse, James Sweeney, has taken a different tack, saying that U.S. inflation could climb as high as 2.3% next year, in response to the lack of rate hikes. Sweeney said that although inflation remains below the Fed target of 2.0%, there are signs in the services sector of inflation picking up.

Overall, the bias in prices is: Sideways.

By the way, prices are vulnerable to a correction towards 1.33.

The projected upper bound is: 1.36.

The projected lower bound is: 1.33.

The projected closing price is: 1.34.

Candlesticks

A white body occurred (because prices closed higher 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 23 black candles for a net of 3 white candles.

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 76.9226. 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 61.45. 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 61 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 109.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 13 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 3 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.003 at 1.344. Volume was 24% above average (neutral) and Bollinger Bands were 44% narrower than normal.

Open High Low Close Volume___
1.341 1.345 1.339 1.344 123,158

Technical Outlook
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.34 1.33 1.32
Volatility: 4 7 8
Volume: 117,860 113,149 92,103

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 1.9% above its 200-period moving average and is in an upward trend. Volatility is low 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 28 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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