Canadian Dollar: USD/CAD (CAD=X) strong fundamentals and a central bank likely to keep rates steady
The Canadian lower dropped 0.19 percent on Friday, but given strong fundamentals and a central bank likely to keep rates steady the Loonie was the only major currency to end in the black against the greenback this week. Job numbers in Canada were lower than expected after the gains in the past two months. The economy lost 2,200 jobs, but wages continued to rise putting the Bank of Canada (BoC) firmly on the hold camp when the central bank meets on Wednesday.
The Ivey PMI surprised to the downside with a larger than expected drop to 52.4 for a four-month low as purchasing managers were less confident. The mixed picture of the Canadian economy continues, but as global growth slows down as trade disputes become more commonplace mixed is better than negative.
The Bank of Canada is likely to keep the 1.75 percent benchmark rate unchanged on Wednesday as inflation pressures remain to the upside. Housing datapoint will be published next week with Housing starts and building permits on Tuesday and the Thursday release of the new housing price index (NHPI) on Thursday. Prices have been stable but more construction is expected to be announced in the major metropolitan areas.
Overall, the bias in prices is: Downwards.
By the way, prices are vulnerable to a correction towards 1.33.
The projected upper bound is: 1.32.
The projected lower bound is: 1.29.
The projected closing price is: 1.31.
A white body occurred (because prices closed higher 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 27 black candles for a net of 4 black 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 30.6989. This is not an overbought or oversold reading. The last signal was a buy 0 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 33.54. 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 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 -75. This is not a topping or bottoming area. The last signal was a buy 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 sell 13 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed unchanged at 1.308. Volume was 100% below average (consolidating) and Bollinger Bands were 92% wider than normal.
Open High Low Close Volume___
1.307 1.308 1.307 1.308 308
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.33 1.33
Volatility: 4 6 7
Volume: 68,136 79,324 92,144
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 1.6% below its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. Our volume indicators reflect moderate flows of volume out of CAD= (mildly bearish). Our trend forecasting oscillators are currently bearish on CAD= and have had this outlook for the last 24 periods.