The uptrend has completely lost its intensity and the rates started decreasing. If this is a price correction, then it turned out to be a very rapid one, because in just five days, the rates reached the one month minimum. It is possible that we are talking about a trend reversal, but will the safe haven Swiss franc have enough incentives to strengthen against the commodity currency?
At the moment, the markets are again full of optimism, amid improved economic forecasts from the International Monetary Fund, as well as better than expected macroeconomic indicators in the United States and China. The growing incidence of coronavirus and geopolitical tensions between China and Taiwan are holding back optimism. Nevertheless, the commodity and stock markets have so far responded with solid growth. In particular, oil is becoming more expensive, which is important for the Canadian dollar. In these circumstances, the perspective for safe assets remains uncertain.
There haven't been many events in the last week. Both Switzerland and Canada had holiday long weekends. However, the latest data speaks in favor of the CAD. According to analysts, the Canadian dollar has more potential for growth, while Europe is heavily dependent on the pandemic.
In the near future, the volatility will increase. Today we will get the PMI business activity indices in Canada, and on Friday - the unemployment reports in Switzerland. Most technical analysis indicators indicate the effectiveness of the deals to SELL. However, we believe that such deals are not promising, and the rates will return to growth in the near future. Therefore, now, with the price so near the minimum, it's time to open the deals to BUY.
