The CAD is supported by high oil prices, while the JPY is weakening due to an extremely soft BoJ monetary policy. The deals to BUY seem the most optimal.
The rates continue in the frames of the uptrend and have become more stable. Interest in the Japanese yen decreases as investors' interest in risky assets is growing. But the main factor in the weakening of the yen is an extremely soft monetary policy, which the Central Bank of Japan is not going to change until the moment the target inflation rate of 2% and other indicators have been achieved. This position contrasts with the hawkish policy of the Bank of Canada and even tougher monetary policy in the United States. This has caused the fall of the Japanese yen against all major currencies, despite the optimal economic performance. The Canadian dollar is also supported by the rise in oil prices, despite the escalation of the trade conflict between the US and China, which distinguishes this currency from other commodity currencies, which have recently been under the pressure due to the trade war and the risks for the global economy.
This week the CAD continues to receive support due to high oil prices. At the same time, a number of analysts suppose that the market has not yet fully taken into account the growth of prices for one of the key goods in Canada's exports. The only factor putting pressure on the CAD is the lack of progress in achieving the trade agreement with the US. It should be noted that today Canada could still have time to join the ready-made trade agreement which the United States prepared with Mexico. In any case, reaching some kind of trade agreement between the US and Canada is a matter of time, according to analysts, and upon its conclusion, the Canadian dollar will receive some support. Moreover, today we expect the most important data on Canada's GDP for the month of July, which can significantly affect the rates. According to forecasts, the GDP should have grown by only 0.1% in July. So to exceed the forecasts will not be difficult for the strong Canadian economy.
At the moment, the Stochastic oscillator signals that the rates are in the overbought zone and there is a high probability of a price correction. However, the most optimal can be considered to be the deals on the trend, given the number of fundamental factors in favor of the CAD.
