Canadian Dollar: USD/CAD (CAD=X) trapped inside of $1.3040-1.3260 range

Canadian Dollar: USD/CAD (CAD=X) trapped inside of $1.3040-1.3260 range

Canadian Dollar: USD/CAD (CAD=X) trapped inside of $1.3040-1.3260 range

The Canadian dollar is trapped inside a USD/CAD $1.3040-1.3260 range and has been, since October 11. There isn’t any relief in sight. The Bank of Canada left monetary policy unchanged at the October 30 meeting, and there hasn’t been any new data or geopolitical developments since then, to alter their economic outlook. That has left Canadian dollar direction at the mercy of global U.S. dollar sentiment. Unfortunately, there is not any consensus around U.S. dollar direction, either.

The primary issue hampering FX traders is the U.S. and China trade negotiations. The trade war fueled a slew of global growth downgrades from institutions like the International Monetary Fund, the World Trade Organization, and the World Bank. They weren’t alone. All the leaders of the G-10 Central Banks said that “global growth concerns from the US/China trade war created downside risks to their domestic economic outlooks.”

Global market participants were excited about a near-term resolution to the trade spat at the beginning of the month. That was thanks to chatter about a “Phase 1” agreement, and speculation that President Trump and Chinese President Xi Jinping would meet in November to sign a deal. The excitement has faded. CNBC reported Chinese officials were concerned about Trump’s failure to agree on tariff rollbacks. They thought rollbacks were part of the Phase 1 deal. The network also said that Chinese officials are discussing waiting for the results of the U.S. election or the Trump impeachment hearings. Trade deal rumours and speculation are rampant, but facts are in short supply.

Technical Indicators

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.34.

The projected lower bound is: 1.32.

The projected closing price is: 1.33.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 5 white candles and 4 black candles for a net of 1 white candles. During the past 50 bars, there have been 27 white candles and 22 black candles for a net of 5 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with FOREX CAD=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

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 46.6669. This is not an overbought or oversold reading. The last signal was a sell 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 61.16. 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 97 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 78. 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 13 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.006 at 1.327. Volume was 27% below average (neutral) and Bollinger Bands were 21% wider than normal.

Open     High      Low     Close     Volume___
1.320 1.327 1.319 1.327 50,756
Technical Outlook 
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bearish
Moving Averages: 10-period     50-period     200-period
Close: 1.32 1.32 1.33
Volatility: 4 5 6
Volume: 67,568 69,457 82,496

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 0.1% below its 200-period moving average and is in an upward trend. Volatility is low 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 5 periods. The security price has set a new 14-period high while our momentum oscillator has not. This is a bearish divergence.

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