As expected earlier, the uptrend has been gradually replaced by a downtrend, which became more intense since February. The Canadian dollar is again negatively affected by the factors of lowering oil prices and the U.S desire to revise the NAFTA agreement, which will be clearly not in favor of Canada. But this week another negative factor has also been added that affects the whole market - fears of a global trade war because of the aggressive protectionist U.S policy. Therefore, it is not surprising that the demand for safe assets increases. The JPY and CHF are more and more popular among investors.
In general, this week was full of various events. In Canada and Japan there were once again meetings of Central Banks where they decided the future of their monetary policy. As a result of the meetings, the discount rates remained unchanged, as expected. The Bank of Canada, despite the positive economic statistics, decided not to change the rate due to the unstable situation on the market, the decreasing oil prices and the risk of revision of the NAFTA agreement. The decline in the trade deficit, from 3 billion CAD to 1.9 billion in January, exceeding investors ' expectations, as well as the growth of the PMI business activity index to 59.6 points in February, ultimately did not affect the rates, although this is certainly a positive signal for the Canadian economy. Given the many negative factors, the CAD fell to an eight-month low, where it is consolidating now.
Thus, at the moment the situation is only in favor of the Japanese yen, supported by convincing economic statistics. Therefore, the most effective course of action would be the deals on the trend. In the medium term that is confirmed by the Stochastic oscillator.
