Canadian Dollar: USD/CAD (CAD=X) U.S-China trade dispute could dampen economic growth
The Canadian dollar is trading sideways in the Monday session. Currently, USD/CAD is trading at 1.3108, up 0.01% on the day. On the release front, it’s a quiet start to the week, with no Canadian events. In the U.S, there are two minor consumer indicators.
There was more good news for the U.S economy on Friday, as Advance GDP posted an impressive gain of 3.5%, above the estimate of 3.3%. This was down from the sizzling Final GDP for Q2, which came in at 4.2%. Still, analysts were not expecting a repeat of the Q2 performance, and the U.S dollar moved higher on Friday. With global stock markets spiraling lower, risk appetite has dampened as investors flock to the U.S dollar at the expense of the Canadian dollar and other currencies. A rash of geopolitical hotspots has weighed on investor sentiment, including the spike in Italian debt, the Brexit impasse and the U.S-China trade war.
As widely expected, the BoC raised the benchmark rate on Wednesday by a quarter-point, to 1.75%. The BoC gave the economy high marks, while at the same time noting that lower oil prices and the U.S-China trade dispute could dampen economic growth. BoC Deputy Governor Carolyn Wilkins noted that even with the increase, rate policy remains “accommodative”, as the “neutral rate” stance won’t be reached until rates are between 2.5% and 3.5%. As the move was priced in, the Canadian dollar could only muster slight gains on Wednesday. Domestically, the situation is bright, and the BoC will be looking at further interest rates in order to boost inflation while ensuring that the strong Canadian economy does not overheat.
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.
A black body occurred (because prices closed lower than they opened).
During the past 10 bars, there have been 7 white candles and 3 black candles for a net of 4 white candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white 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 81.3475. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 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 59.92. 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 88 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 110.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 4 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 buy 16 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.000 at 1.313. Volume was 91% below average (consolidating) and Bollinger Bands were 7% narrower than normal.
Open High Low Close Volume___
1.313 1.313 1.312 1.313 7,821
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.31 1.30 1.29
Volatility: 5 8 9
Volume: 84,703 83,681 89,749
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% above its 200-period moving average and is in an upward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 13 periods.
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