Canadian Dollar: USD/CAD (CAD=X) target 1.3500

Canadian Dollar:  USD/CAD (CAD=X) target 1.3500

Canadian Dollar: USD/CAD (CAD=X) target 1.3500

With markets priced for a July BoC hike and the CAD having enjoyed a rally recently, we think much of the good news is in the price setting up for a “buy the rumour/sell the fact” outcome. We think CAD is one of the most poorly situated currencies in the G10 as trade tensions have escalated.

Indeed with NAFTA talks on hiatus, trade tariffs underway with little reprieve on the horizon and Canada running a large negative external balance, CAD’s return profile remains asymmetrically skewed to the downside. We think it is a high bar for a tone to emerge from the BoC meeting that supports CAD from here.

Now that rates are off the floor, household indebtedness high and interest payments accelerating, consumption spending will not be as robust as it was in the past, making it more difficult for the economy to obtain near-trend growth and deliver hikes in quick succession. As such, we see USD/CAD remaining north of 1.30 over the balance of the year.”

Daily uptrend support located near 1.3050 with interim resistance located near the 1.34 YTD high.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.33.

The projected lower bound is: 1.30.

The projected closing price is: 1.31.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 5 white candles and 5 black candles. During the past 50 bars, there have been 32 white candles and 17 black candles for a net of 15 white candles.

Three white candles occurred in the last three days. Although these candles were not big enough to create three white soldiers, the steady upward pattern is bullish.

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 49.2667. This is not an overbought or oversold reading. The last signal was a buy 1 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 51.92. 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 9 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 -57. This is not a topping or bottoming area. The last signal was a buy 1 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 sell 8 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.003 at 1.314. Volume was 93% below average (consolidating) and Bollinger Bands were 21% narrower than normal.

Open High Low Close Volume___
1.311 1.315 1.311 1.314 6,341

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.30 1.28
Volatility: 8 8 9
Volume: 76,229 87,949 81,939

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 2.9% above its 200-period moving average and is in an downward trend. Volatility is relatively normal 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 bearish on CAD= and have had this outlook for the last 1 periods.

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