The Canadian dollar continues its rally, along with oil and gas prices. On the chart, we can see that the price correction that began 30 days ago is coming to the end. Recent reports on the release of strategic oil reserves in the United States and China, according to the experts, will have a short-term effect because strategic reserves are limited, and sooner or later they will have to be restored. So after a certain pause, oil can continue growing.
Market analysts agree that the Canadian dollar remains the strongest currency, and the yen has no chance in a confrontation with it. The Canadian dollar is supported not only by the oil rally, but also by the most hawkish monetary policy. It is expected that the Bank of Canada will outstrip the Fed in raising interest rates, so there is every reason to expect a resumption of the upward movement, especially if the macroeconomic reports expected next week do not fail and exceed forecasts.
The Japanese yen, under the influence of the opposite extremely soft monetary policy, is under pressure. The Japanese government has adopted a record package of incentives for the Japanese economy, while other key countries, on the contrary, are reducing stimulus. The probability of an increase in the rate in Japan, of course, is close to zero. At the same time, the state of the economy is deteriorating - last week it became known that the trade deficit has grown for the third month in a row, unlike the surplus which was recorded a year earlier. It is also expected that the rise in raw material prices will negatively affect the economy of the country, which depends on the import of all resources, in the future.
Technical analysis tools are a bit multidirectional, but the choice is obvious to us today. Today, when prices for the Canadian dollar have declined slightly, it's time to buy the CAD, in anticipation of a recovery and it reaching new highs. The Stochastic oscillator signal corresponds to our solution.
