The downward trend continues, although since the beginning of the year we have observed a complete loss of its intensity. However, in August, after the price correction, the downward movement resumed, taking into account the weakening of the euro. Investors expect the ECB to soften their monetary policy and introduce additional stimulus measures. Published this week, the minutes of the last ECB meeting also show the regulator's concern about the current situation in the EU economy, which increases investors' expectations for a rate change in September. However, recent macroeconomic reports have shown an improvement in the economic situation: business activity in the manufacturing sector of France, Germany, and the EU as a whole has increased. This is especially true of France, where the PMI index of business activity in August returned to the 50+ zone, amounting to 51 pips. The PMI Composite index of business activity of the Eurozone rose to 51.8 pips in August, exceeding forecasts.
Canada remains in the focus of investors as the country with the most hawkish monetary policy. At the last meeting, the Bank of Canada took a wait-and-see position, and the latest macroeconomic reports show that this may have been the right decision. According to data for July, in Canada there is an acceleration of inflation to 2%.Oil does not support the CAD, but also does not exert pressure because its cost is kept in the range of 54-56 dollars.
Over the next 7 days, investors expect the publication of important reports for both currencies: the retail sales index published today in Canada, as well as the GDP of Germany and Canada, the consumer price index of Germany and unemployment data next week. Therefore, volatility will increase in the near future, considering also the symposium in Jackson Hole, where the speech of the head of the FED Jerome Powell is expected, following which, the demand for risky assets may change. We suppose that the deals to SELL will be most effective in the medium term. Most of the technical analysis tools are also inclined to open the deals on the trend.
