Since the beginning of the month the rates have been in the frames of the rapid upward trend. Now the rates are consolidating in the range of 88.3-89.63 JPY. The rapid strengthening of the Canadian dollar is related with the increase of oil prices, signs of the oil market stabilization and an exit from the oil crisis. The statistics about the Canadian economy also had their impact. The current situation in Japan was also in favour of the CAD, because the decision of the Bank of Japan to leave interest rates unchanged had a negative impact on the yen.
The Canadian dollar was strong enough to withstand the onslaught of the yen this week. In addition to the growth in oil prices, the rates of the CAD/JPY were also affected by the level of inflation in Canada, which was just 1% yoy in June, which is the lowest level since October 2015, as well as data about retail sales, which amounted to 0.6% on a monthly basis, and is gradually increasing for the third month in a row. Today's statistics about the unemployment rate in Japan has shown a lower unemployment rate compared to the previous month and amounted to 2.8%. But this only temporarily strengthened the yen within the price correction. Even the household spending index, which unexpectedly rose by 2.3% against the expected 0.6%, did not change significantly the situation for the yen.
At the moment the market is waiting for GDP data from Japan, which will be known today. In a week investors will be waiting for economic statistics from Canada. At the moment after a slight strengthening of the yen and a price correction, the rates are in the oversold zone, as we can see with the Stochastics oscillator. In this situation we have a good moment to open the deals to BUY in short-term trading. Right now we can see on the chart the formation of a flat trend, so you should pay attention to the entry points 88.3 and 89.63 JPY, the achievement of which would signal the exit from the phase of consolidation and then the continuation or completion of the current uptrend.
