The downward trend continues, despite all risks associated with the further development of the coronavirus pandemic. Moreover, investors regularly find reasons for optimism and continue investing in risky assets. That's what happened this week. This time, commodity assets were chosen not only due to the recovery of the Chinese economy, but also due to the high probability of Joe Biden's victory in the US election, which is regarded as strengthening the incentives for the US economy, as well as a perspective for improving US - China relations.
Oil prices, which are holding above the critical $40 mark, also encourage the Canadian dollar to grow, especially amid the weakening of the USD, which is losing its position as a safe asset, as well as due to weak US employment reports. Disappointing data on the growth of Canada's trade deficit did not change the situation: the rapid downward movement continued anyway. Oil prices have received a lot of incentives to grow this week, from hurricane Delta in Mexico to strikes by oil workers in Norway, which threatened to disrupt oil supplies.
On the chart, we can see the rates in the oversold zone - according to the Stochastic oscillator signal. However, there is every reason to expect a further decrease in the rates, given that a series of reports on the Chinese economy is expected next week, and the high probability of resuming negotiations in the US on stimulus packages for the economy will put pressure on the USD. Most technical analysis tools also indicate the efficiency of the deals on the trend.
