Canadian Dollar: USD/CAD (CAD=X) underpinned by a surge in oil prices

Canadian Dollar: USD/CAD (CAD=X) underpinned by a surge in oil prices

Canadian Dollar: USD/CAD (CAD=X) underpinned by a surge in oil prices

USD/CAD has edged lower in the Monday session. In the North American session, the pair is trading at 1.3372, down 0.14% on the day. It’s a quiet start to the week, with no Canadian events. In the U.S., there is only one release. Existing home sales is expected to slow to 5.31 million in March, after a strong reading of 5.51 a month earlier. Housing data will remain in focus on Tuesday, with the release of the housing price index and new home sales.

Oil prices have spiked on Monday, after the Trump administration announced that it would terminate sanction waivers given to some importers of Iranian oil, as of May 1. This move is intended to further tighten sanctions against Iran and cripple Iranian oil exports. Crude oil has jumped to its highest level since early November. This could boost the Canadian currency this week, as Canada is a major oil producer.

Canadian consumer spending and inflation numbers were solid last week, but that wasn’t enough to prevent a losing week for the Canadian dollar. CPI remained steady at a respectable 0.7%. Retail sales jumped 0.8%, ending a losing streak of three straight declines. Core retail sales also were solid, with a gain of 0.6%.

The spotlight will be on the Bank of Canada on Wednesday, as officials set the benchmark rate and release a rate statement. With the Canadian economy showing signs of a slowdown, there has been talk of the BoC cutting rates, with futures markets pricing in a cut the next time that the bank makes a move. However, the benchmark rate is expected to remain pegged at 1.75% for a fifth straight month at this week’s meeting.

Canadian consumer spending and inflation numbers were solid last week, but that wasn’t enough to prevent a losing week for the Canadian dollar. CPI remained steady at a respectable 0.7%. Retail sales jumped 0.8%, ending a losing streak of three straight declines. Core retail sales also were solid, with a gain of 0.6%.

Overall, the bias in prices is: Sideways.

The projected upper bound is: 1.35.

The projected lower bound is: 1.32.

The projected closing price is: 1.33.

Candlesticks

A black body occurred (because prices closed lower 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 25 white candles and 24 black candles for a net of 1 white candles.

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 74.2425. This is not an overbought or oversold reading. The last signal was a buy 13 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 49.25. 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 78 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 24. This is not a topping or bottoming area. The last signal was a sell 0 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 1 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed down -0.005 at 1.334. Volume was 38% below average (neutral) and Bollinger Bands were 62% narrower than normal.

Open High Low Close Volume___
1.339 1.339 1.333 1.334 62,793

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

Moving Averages: 10-period 50-period 200-period
Close: 1.34 1.33 1.32
Volatility: 5 7 7
Volume: 93,290 110,433 93,453

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 1.0% 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 5 periods.

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