The rates continue within the frames of a weak downtrend, which has all chances to become flat. The Canadian dollar seems stronger and successfully resisted the euro even in April, when there was a collapse on the oil market. The reason for this is that the euro was even weaker at this time because the EU was at the peak of the coronavirus pandemic. The further easing of the quarantine had a positive impact on the Canadian dollar, as it caused a recovery in oil prices, while the euro remained under pressure due to disastrous macroeconomic reports in March and April. In particular, the business activity index fell to a record low of 15.1 pips in April.
The economic indicators from Canada have also deteriorated: the situation on the real estate market remains disastrous, and unemployment has risen to the highest level for the past 48 years. However, the recovery in oil prices makes the Canadian dollar stronger than the euro. Today European stocks declined due to concerns about the beginning of a second wave of the pandemic, starting with Asia. In this situation, the Canadian dollar turned out to be more stable, although being a commodity asset, it is under pressure also.
Technical analysis indicators are multidirectional at the moment. However, we believe that the Stochastic oscillator, which indicates the efficiency of the deals on the trend, will be the most accurate predictor this time around.
