USD/CAD (CAD=X) on the Offensive

USD/CAD (CAD=X) on the Offensive

USD/CAD (CAD=X) on the Offensive

  • Canadian dollar at C$1.3266, or 75.38 U.S. cents
  • Chance of Bank of Canada July rate hike rises to 65 pct
  • Price of U.S. oil rises nearly 1 percent
  • Canadian bond prices move lower across the yield curve

The Canadian dollar strengthened against its U.S. counterpart on Thursday, bolstered by a 3-1/2 year high for oil prices and as investors added to bets for a Bank of Canada interest rate hike next month.

Chances of a rate increase at the July 11 announcement have climbed to 65 percent from less than 50 percent before a press conference on Wednesday by Bank of Canada Governor Stephen Poloz that was more hawkish than a speech that had preceded it, data from the overnight index swaps market showed.

At 4 p.m. EDT (2000 GMT), the Canadian dollar was trading 0.5 percent higher at C$1.3266 to the greenback, or 75.38 U.S. cents. The currency touched its strongest since June 19 at C$1.3242.

Overall, the bias in prices is: Upwards.

By the way, prices are vulnerable to a correction towards 1.30.

The projected upper bound is: 1.34.

The projected lower bound is: 1.31.

The projected closing price is: 1.33.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 34 white candles and 15 black candles for a net of 19 white candles.

A bullish harami occurred (where the current small white body is contained within an unusually large black body). During a downtrend this pattern implies an end to the decline as the bears appear to have exhausted themselves.

During an uptrend (which appears to be the case with FOREX CAD=) the bullish harami pattern is bearish as the bears appear to be gaining strength as the bulls weaken.

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 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 25.4117. 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 62.09. 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 1 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 25. This is not a topping or bottoming area. The last signal was a sell 4 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 0 period(s) ago.

Rex Takasugi – TD Profile

FOREX CAD= closed up 0.001 at 1.326. Volume was 96% below average (consolidating) and Bollinger Bands were 44% wider than normal.

Open High Low Close Volume___
1.325 1.326 1.324 1.326 3,398

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

Moving Averages: 10-period 50-period 200-period
Close: 1.33 1.30 1.27
Volatility: 6 8 9
Volume: 83,252 88,735 81,292

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 4.0% 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 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 11 periods.

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