Canadian Dollar: USD/CAD (CAD=X) remains largely flat at the start of the week as UK manufacturing data disappointed
However, on Tuesday the pairing edged up after further PMI data showed the construction sector saw the slowest decline in output since July.
Meanwhile, oil prices edged up in the hopes OPEC and allies would agree to further cuts during the OPEC+ meeting. However, price gains were largely limited which allowed GBP to rise against CAD.
On Wednesday, a spark in Brexit optimism buoyed Sterling as markets believed the Conservative Party would be able to secure a majority in the UK election.
While the UK services PMI showed new work in the sector suffered the sharpest decline in over three years, a YouGov poll revealing the Tories increased its lead over Labour offset weak data.
On Wednesday afternoon the pairing edged lower ahead of the Bank of Canada’s (BoC) interest rate decision.
The BoC left rates unchanged during Wednesday’s meeting and on Thursday Deputy Governor Timothy Lane said that the economy remains resilient despite heightened global uncertainty caused by slower growth and trade tensions, supporting the ‘Loonie’.
The Canadian Dollar was provided with a slight boost as on Thursday as US President Donald Trump said talks between Washington and Beijing were ‘moving right along’.
Added to this, OPEC agreed to cut output by an extra 500,000 barrels a day for the first quarter of 2020.
Meanwhile, at the end of the week the Pound edged lower as investors braced for next week’s election. However, Sterling moved towards its best week in trade since mid-October.
The ‘Loonie’ edged lower as oil prices slipped. However, prices were on track for weekly gains as OPEC+ agreed to cuts in 2020.
However, CAD slumped at the end of the week as data revealed the Canadian unemployment rate surged to 5.9% from 5.5% as employment slumped by 71.2K.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.32.
The projected upper bound is: 1.34.
The projected lower bound is: 1.31.
The projected closing price is: 1.33.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 3 white candles and 7 black candles for a net of 4 black candles. During the past 50 bars, there have been 23 white candles and 26 black candles for a net of 3 black candles.
A bearish harami occurred (where the current small black body is contained within an unusually large white body). During an uptrend (which appears to be the case with FOREX CAD=) this pattern implies an end to the rally as the bulls appear to have exhausted themselves.
During a downtrend the bearish harami pattern is bullish as the bulls appear to be gaining strength as the bears weaken.
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 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 43.3131. This is not an overbought or oversold reading. The last signal was a buy 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 51.68. 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 111 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 -44. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 3 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.000 at 1.325. Volume was 100% below average (consolidating) and Bollinger Bands were 36% narrower than normal.
Open High Low Close Volume___
1.325 1.326 1.325 1.325 201
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.32 1.33
Volatility: 6 5 6
Volume: 42,818 62,427 77,814
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 0.2% below 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 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 19 periods.