The uptrend lost its intensity in September, although it may still recover. The support line is still pointing up, while the resistance line is turning in the opposite direction. Does the Canadian dollar have a chance to recover against the yen? There are chances, but it will not be easy.
Oil prices are the main factor holding back the Canadian dollar. So far, oil remains above $40, but given the development of the pandemic, the demand for oil will be limited. At the moment, the market is on the verge of oversupply amid growing reserves in the United States and increased extraction in Libya. At the same time, many countries are now one step away from the decision to resume the lockdown on their territory due to a record increase in the incidence of infections.
Risk assets were supported this week by news of good perspectives for the adoption of a stimulus package for the US economy, which is also key for neighboring Canada, which exports a lot of products to the US. However, fears of a pandemic do not motivate investors to buy risky assets.
We believe that in the current situation, the deals to SELL will be the most promising in the medium term. Given the limited growth in oil prices and many risks for the global economy, the yen will become a more attractive asset compared to the Canadian dollar.
