In this review, we suggest considering the personal composite instrument (PCI) CAD_Index - currency index CAD. It reflects the price dynamics of the portfolio of major currencies: EUR, USD, GBP, AUD, CHF, JPY against the Canadian dollar. Will the CAD_Index prices rise?

Expensive oil can improve the performance of the Canadian economy, as the share of hydrocarbons in exports exceeds 15%. Note that in addition to oil, Canada also supplies natural gas to the world market, the prices of which are increasing together with oil. It ranks 4th in its exports after Russia, Qatar and Norway. An additional factor for the possible growth of the Canadian dollar may be an increase in inflation in February 2018, year over year to 2.2%. This is the maximum since October 2014. The increase in inflation may prompt the Bank of Canada to raise the rate. Currently, it amounts to 1.25%, which is lower than the US Fed rate (1.5-1.75%). Last week, Canadian authorities said that Canada and the United States had made progress in bilateral talks to renegotiate the North American Free Trade Agreement. This is another positive factor for the Canadian dollar. The next meeting of the Bank of Canada will be held on April 18, 2018. This Thursday, there will be data on Canadian GDP for January, which may affect the exchange rate.

CAD_Index

On the daily timeframe, CAD_Index: D1 moved upward from the downtrend. The further price increase is possible in case of the publication of positive economic data in Canada and the preservation of high oil prices.

  • The Parabolic indicator gives a bullish signal.

  • The Bollinger bands have widened, which indicates high volatility. The lower band is tilted upward.

  • The RSI indicator is near 50. It has formed a positive divergence.

  • The MACD indicator gives a bullish signal.

The bullish momentum may develop in case CAD_Index exceeds the last fractal high at 0.769. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the 2-year low and the Parabolic signal at 0.754. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level at 0.754 without reaching the order at 0.769, we recommend cancelling the position: the market sustains internal changes that were not taken into account.

 

Summary of technical analysis

 

Position

Buy

Buy stop

Above 0,769

Stop loss

 Below 0,754

 

 

 

Want to get more FREE Analytics? Open Demo Account now to get daily analytical materials and video overviews, experts' opinions etc. Don't forget to subscribe to our YouTube channel.

This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD pares gains below 1.0500 amid Conservatives German election win

EUR/USD pares gains below 1.0500 amid Conservatives German election win

EUR/USD pares gains back below 1.0500 in the European session on Monday. The pair still stays supportec by the German Conservatives Party win in the federal election, which revived hopes for better economic outlook. The upside remains elusive due to a cautious mood and mixed German IFO data. 

EUR/USD News
GBP/USD eases to near 1.2650 ahead of BoE-speak

GBP/USD eases to near 1.2650 ahead of BoE-speak

GBP/USD reverses gains to trade near 1.2650 in European trading on Monday. The pair eases as the US Dollar pauses its decline but the downside appears capped ahead of speeches from several BoE policymakers. 

GBP/USD News
Gold price remains stuck in multi-day-old trading range near all-time peak

Gold price remains stuck in multi-day-old trading range near all-time peak

Gold price continues with its struggle to gain any meaningful traction and remains confined in a multi-day-old trading range through the first half of the European session on Monday. Investors remain worried that Donald Trump's trade tariffs would trigger a global trade war which continues to act as a tailwind for the safe-haven bullion.

Gold News
Solana drops below $160, liquidating $26 million in leverage as negative funding rate weighs in

Solana drops below $160, liquidating $26 million in leverage as negative funding rate weighs in

Solana price extends its decline and trades around $160 on Monday after falling over 11% last week. The recent correction in SOL has triggered a wave of over $26 million in liquidations in the last 24 hours and $110 million last week.

Read more
Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK

We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

Read more
The Best brokers to trade EUR/USD

The Best brokers to trade EUR/USD

SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.

Read More

Majors

Cryptocurrencies

Signatures

Best Brokers of 2025