The confrontation between commodity currencies and safe assets continues, in favor of the latter. The coronavirus leaves no chance for the CAD to strengthen. The situation is aggravated by the collapse on the oil market caused by the pandemic, its consequences for the global economy, as well as the conflict between OPEC and Russia, who could not agree to reduce oil extraction due to the current situation and falling demand.
On March 9, panic increased. Something similar had already been observed before the Great Depression of 1929. Therefore, it is likely that the new crisis will be more crushing and prolonged than the crisis of 2008. It is becoming increasingly clear that regardless of the duration of the coronavirus epidemic, the consequences for the global economy will be significant. Therefore, the demand for the yen is growing. The Canadian dollar was also under pressure on Friday after the Bank of Canada's decision to cut the rate by 50 pips, as well as due to the rapid fall in industrial production output in China, which leads to a decrease in the demand for raw materials.
In the current situation, we believe that the deals to SELL remain relevant. Most technical analysis tools confirm the efficiency of short deals in the short and long terms.
