Home FX CAD Canadian Dollar: USD/CAD (CAD=X) Shows Strength Despite Oil Price Weakness

Canadian Dollar: USD/CAD (CAD=X) Shows Strength Despite Oil Price Weakness

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Canadian Dollar: USD/CAD (CAD=X) Shows Strength Despite Oil Price Weakness

Markets Stay Optimistic For Now, Leading To Weakness In The U.S. Dollar

The Canadian dollar is showing strength despite continued weakness in oil, which is hurt by prospects of worsening oil demand.

The U.S. Dollar Index was in a correction mode today and almost touched 101 but has then rebounded and trades closer to 102. Trading in many asset classes has been choppy today, but currently the positive momentum from the previous trading session is maintained as markets hope that the U.S. coronavirus aid package together with Fed’s unlimited QE would provide material support for most assets.

These hopes increase investors’ risk appetite which is bearish for the U.S. dollar in the current market environment as the American currency is viewed as a safe haven asset of last resort.

It remains to be seen when the euphoria from the massive monetary stimulus ends and the markets will turn to the actual economic data. I believe that the upcoming Initial Jobless Claims data, which is set to be published on Thursday, will have a major impact on the currency markets.

The current consensus number is one million, a huge increase from the previous reading of 281,000. If the actual data shows that the situation is even worse, the U.S. dollar may receive material support due to its safe haven status.

Technical Indicators

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: 1.46.

The projected lower bound is: 1.40.

The projected closing price is: 1.43.

Candlesticks

A white body occurred (because prices closed higher 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 34 white candles and 16 black candles for a net of 18 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 31.8651. This is not an overbought or oversold reading. The last signal was a sell 4 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 64.21. 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 1 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 28. This is not a topping or bottoming area. The last signal was a sell 2 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 20 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.007 at 1.426. Volume was 40% below average (neutral) and Bollinger Bands were 338% wider than normal.

Open     High      Low     Close     Volume___
1.419 1.427 1.418 1.426 37,534
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1.43 1.35 1.33
Volatility: 23 13 8
Volume: 114,030 76,017 66,444

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 7.5% 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 46 periods.

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