In CAD/JPY quotes, we observe a trend reversal. At the beginning of the month, it was possible to talk about a price correction, but the Canadian dollar completely lost the initiative, and this week began a rapid decline. Oil remains at a minimum level for now, although forecasts for oil prices are positive for the Canadian dollar. Will the Canadian dollar be able to get back quickly to its peak? - Looking for answers in this review.
Of course, one of the negative factors for CAD is oil, the cost of which fell to a minimum at the end of the year, although there is still potential for growth and oil forecasts for 2023 - oil at $ 100-120 while maintaining the embargo on Russian oil and the continuation of the military conflict in Europe. Another factor is the recession of the global economy, the fears of which do not contribute to investments in commodity risky assets, and high rates, including the interest rate itself, will slow down economic growth even more. Against this background, the Japanese yen seems to be the safest and preferred asset, especially after signs of a change in monetary policy in Japan, announced this week by the Bank of Japan. What if JPY in 2023 will not be as weak as this year?
Today, the focus is on the GDP report in Canada. Further, volatility will fall due to the New Year holidays. Most technical analysis tools indicate the effectiveness of short trades by showing a Sell signal. In the current situation, we consider such deals successful in the short term. At the same time, do not forget that the Canadian dollar is a promising currency that can be supported not only by macroeconomic reports, but also by rising oil prices. MACD, RSI oscillators indicate oversold in CAD/JPY. So buying deals have good potential and can work in the long run.
