Canadian Dollar: USD/CAD (CAD=X) retracement continues
It was a month ago now that USD/CAD had bottomed-out. While the pair had spent much of the prior 17 months trending-higher, sticking to a bullish trendline for much of the time, the month of June brought a strong change of pace as the US Dollar fell while the Canadian Dollar strengthened.
Out of the US, the USD was being driven lower by the prospect of rate cuts from the FOMC, and in Canada, a strong inflation print highlighted the fact that the BoC likely wouldn’t be able to adopt a similar stance.
In short-order, USD/CAD fell from a late-May high above 1.3500 all the way down to the 1.3000 handle in mid-July. At that point, sellers began to shy away from a test of the big figure and later in the month, a falling wedge formation had formed, pointing to the potential for a bullish reversal. That theme has played out and almost a month later, continues to hold.
Canadian inflation moderated in June, dropping back down to 2% after printing at 2.4% for the month of May. That 2.4% print is what helped to drive strength in the currency during that run in June, and the fact that this pulled back a bit is what’s helped CAD weakness to return over the past month. The next Canadian inflation print is due in a week, released next Wednesday morning at 8:30 AM ET. This will likely be the next major push point in the pair.
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.
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 26 white candles and 24 black candles for a net of 2 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 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 68.7499. This is not an overbought or oversold reading. The last signal was a sell 12 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 64.32. 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 29 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 159.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 5 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 buy 27 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.000 at 1.332. Volume was 98% below average (consolidating) and Bollinger Bands were 9% wider than normal.
Open High Low Close Volume___
1.332 1.332 1.331 1.332 1,332
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.32 1.33
Volatility: 6 6 7
Volume: 74,744 70,503 89,533
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 0.1% 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 15 periods.