The rates continue in the frames of an upward trend, although at the end of May there was a probability of a trend completion. The Canadian dollar a few weeks ago was under pressure due to the uncertainty regarding the NAFTA agreement amid the introduction of trade duties on imports of steel and aluminum in the United States. In addition, decline in oil prices from 72 to 65 dollars per barrel CL/WTI has negatively impacted the CAD value.
Starting from June, the CAD is recovering in price, which reduced the probability of a trend reversal. Investors expect the Bank of Canada to raise the discount rate in July, despite a number of risks for the Canadian economy associated with trade negotiations between the USA and the decreasing oil value.
The Japanese yen is still in search of growth incentives amid slowing economic growth and weak economic statistics. In particular, data on the industrial production in April showed an increase by only 0.3%, while investors expected an increase by 1.4%. The demand for safety assets is not high at the moment. The Canadian dollar, on the other hand, may receive an incentive to grow if today's data on the trade balance and PMI index of business activity matches the expectations of investors. The Stochastic oscillator signals that the rates are in the overbought area and there is a high probability of a price correction. However, in the medium term, the most optimal seem the deals to buy, according to the trend.
