Canadian Dollar: USD/CAD (CAD=X) under pressure as oil prices fell as Chinese demand continued to weaken
Exchange Rates UK: Over the course of the week, the Canadian Dollar (CAD) rose against both the US Dollar (USD) and Euro (EUR), but fluctuated against the Pound (GBP).
On Monday, the ‘Loonie’ was left under pressure as oil prices fell as Chinese demand continued to weaken.
The spread of Covid-19 caused oil demand to slump, and since its peak in January, demand for the commodity from the world’s largest importer plummeted by more than 20%.
Commenting on the lower demand, Ole Hanson, Saxo Bank commodity strategist said:
‘The concern remains that the wider markets have yet to reflect the full impact of the disruption. With China being the world’s most dominant consumer of raw materials, the impact continues to be felt strongly across key commodities and the world is facing the biggest demand shock since the 2009 global financial crisis.’
Against the Dollar, CAD hit a four-month low on Monday as Covid-19 worries overshadowed some better-than-expected housing stats.
Tuesday saw oil prices edge up by 1%, which likely sent CAD higher against EUR and USD. However, investors continued to focus on the spread of coronavirus.
CAD/USD was able to rise as markets awaited Federal Reserve Chair, Jerome Powell’s twice-a-year update to Congress.
The ‘Loonie’ rose against a handful of currencies on Wednesday despite reports revealing that OPEC cut its global growth forecast for oil demand over the year.
OPEC stated it expects global demand to be around 200,000 barrels per day less than originally anticipated.
On Thursday, the Canadian Dollar plummeted against the Pound, falling from around £0.58 to £0.57. Although CAD continued to rise against the Dollar and Euro.
Thursday saw a sharp increase in the number of reported coronavirus cases, with risk appetite slumping as close to 15,000 cases were reported in a single day.
The number of deaths from the virus jumped to a daily high of 242, which sent CAD/GBP lower.
Meanwhile, at the end of the week oil prices edged higher and were on track for the first weekly gain since early January. Prices were supported by expectations that producers will implement deeper cuts to offset slowing Chinese demand.
Overall, the bias in prices is: Sideways.
By the way, prices are vulnerable to a correction towards 1.32.
The projected upper bound is: 1.33.
The projected lower bound is: 1.32.
The projected closing price is: 1.33.
A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 28 white candles and 22 black candles for a net of 6 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 26.6667. This is not an overbought or oversold reading. 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 57.79. 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 4 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 -27. This is not a topping or bottoming area. 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 sell 1 period(s) ago.
Rex Takasugi – TD Profile
FOREX CAD= closed down -0.000 at 1.325. Volume was 99% below average (consolidating) and Bollinger Bands were 5% wider than normal.
Open High Low Close Volume___
1.325 1.326 1.324 1.325 573
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.31 1.32
Volatility: 3 4 5
Volume: 48,660 48,076 64,547
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 0.3% above its 200-period moving average and is in an upward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. 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 18 periods. our momentum oscillator has set a new 14-period low while the security price has not. This is a bearish divergence.