Canadian Dollar: USD/CAD (CAD=X) Stuck Between U.S. Initial Jobless Claims And Trump Tweet
Canadian Dollar Receives Support From A Surge In Oil Prices Following Trump Tweet
USD/CAD had another volatile trading session today. First, the U.S. dollar got a boost due to safe haven asset buying following the release of the U.S. Initial Jobless Claims.
The release showed that as many as 6.6 million Americans applied for unemployment benefits, which is a new record. Clearly, the coronavirus containment measures are putting heavy pressure on the real economy.
Soon, the Canadian dollar got sudden support from a surge in oil prices. U.S. President Donald Trump tweeted that Russia and Saudi Arabia could cut oil production by 10 million barrels.
In a later tweet, he added that the production cut could be as high as 15 million barrels. No official deal has been announced yet.
I’d note that the market clearly viewed the original tweet as an indication that Russia and Saudi Arabia are ready to cut production by 10 million barrels per day, but the President’s tweet did not contain the “per day” part.
The following tweet about a potential 15 million barrels production cut clearly eliminates the “per day” possibility since it is obvious that Russia and Saudi Arabia would not halt the majority of their production capacity.
However, some deal may be in the works and support oil prices, which is a bullish factor for the Canadian dollar.
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 white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 32 white candles and 18 black candles for a net of 14 white candles.
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 54.1426. This is not an overbought or oversold reading. The last signal was a buy 3 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 57.88. 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 7 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 -47. This is not a topping or bottoming area. The last signal was a sell 8 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 6 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed up 0.003 at 1.417. Volume was 60% below average (consolidating) and Bollinger Bands were 118% wider than normal.
Open High Low Close Volume___
1.413 1.417 1.411 1.417 27,618
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: 121,109 86,320 68,111
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 6.6% above its 200-period moving average and is in an upward trend. Volatility is high as compared to the average volatility over the last 10 periods. 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 52 periods.