Canadian Dollar: USD/CAD (CAD=X) Risk-Off Mode Helps U.S. Dollar
USD/CAD moved higher as riskier assets experienced sell-off due to coronavirus-related worries. Three countries – U.S., Italy and Spain – have more than 100,000 cases each, and the U.S. is close to 200,000 cases.
Recently, German Chancellor Angela Merkel indicated that social distancing measures will be in place until April 19, 2020, and it looks like most developed economies will spend the full month of April under lockdowns of various severity.
In such environment, investors and traders turn to U.S. dollar as the safe haven asset of last resort, and the U.S. Dollar Index has tried to breach the psychologically important 100 mark today.
Both U.S. and Canada reported Manufacturing PMI numbers for March. Not surprisingly, both reports showed contraction of manufacturing activity. Investors should expect that Manufacturing PMI for April will look even worse given the current virus containment measures.
The key question of the recent days was whether the U.S. dollar would maintain its status of the safe haven asset of last resort as the coronavirus situation in the U.S. continued to deteriorate.
At this point, this status is confirmed, and the U.S. dollar is gaining ground against a broad basket of currencies at a time when the market is worried about the impact of coronavirus-related measures on the economy.
Currently, this is a bullish factor for USD/CAD which continues to receive buyer support following the downside move of the past week.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
By the way, prices are vulnerable to a correction towards 1.37.
The projected upper bound is: 1.45.
The projected lower bound is: 1.39.
The projected closing price is: 1.42.
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 32 white candles and 18 black candles for a net of 14 white candles.
A long lower shadow occurred. This is typically a bullish signal (particularly when it occurs near a low price level, at a support level, or when the security is oversold).
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 47.5421. This is not an overbought or oversold reading. The last signal was a buy 2 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 58.89. 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 6 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 -26. This is not a topping or bottoming area. The last signal was a sell 7 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 5 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.000 at 1.418. Volume was 67% below average (consolidating) and Bollinger Bands were 160% wider than normal.
Open High Low Close Volume___
1.419 1.419 1.414 1.418 22,573
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.42 1.36 1.33
Volatility: 19 14 8
Volume: 120,009 84,457 67,788
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 6.8% above 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 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 51 periods.