The downward trend in favor of the Canadian dollar continues. Both currencies have weakened this year, with the addition of another negative factor that threatens not only people's health, but also the health of the world economy. In this case, the Canadian dollar was more stable despite its dependence on the situation on the oil market.
This week, the Euro was under strong pressure, which led to a rapid weakening against most currencies. Disappointing reports on the German economy weakened the euro. In addition, the ECB's readiness to stimulate the EU economy more and more, as well as the further spread of the coronavirus (mainly in Asia) negatively impact value of the euro. However, it is not possible to find incentives for growth in the long term. The strengthening of the Euro on Thursday due to the growth of business activity in the German manufacturing sector, as well as the easing of fears about the coronavirus, can only be considered short-term. It is possible that the euro will be supported by the publication of GDP reports in Germany and France next week, but the presence of external negative factors will not allow the Euro to change the situation in its favor.
Canada's economy is considered the least affected by the slowdown in the global economy. Also, it does not depend much on exports to China directly. However, the fall in oil prices due to the situation in China will put pressure on the CAD. Nevertheless, Canada's GDP for the 4th quarter of last year may please investors. We believe that the minimum has not yet been reached and the deals on the trend are still relevant. Also, there are no signs of consolidation on the chart, though this scenario is very likely in the future. Most technical analysis tools also tend to short deals in long-term trading.
