Since September we have observed a rapid downward trend. The yen has steadily strengthened against the Canadian dollar, despite the rising oil prices. This was mainly based on the stable economic and political situation in Japan.
This week the Canadian dollar managed to strengthen against the yen amid news about the extension of the agreement to reduce oil extraction to the end of 2018, which certainly had a positive impact on the value of oil. At the same time, the JPY came under pressure due to geopolitical factors - new tests of ballistic missiles by North korea. At the same time, the latest data about the economy of Japan continues to show economic growth and provides maximum support for the yen. The unemployment rate remains at 2.8% for the fifth consecutive month, while the manufacturing PMI index in November has risen to 53.6 pips, showing the most rapid growth since March 2014. Inflation was 0.2% in October, and the volume of capital investment has increased by 4.2% in Q3, exceeding the expectations of investors.
Today the market is waiting for important economic data from Canada: data about the GDP for the third quarter of 2017, as well as the unemployment rate for November. This is why the volatility will increase soon and the Canadian dollar could get support. In any case, the rates will continue in the frames of the downtrend. At the moment we can't see on the chart any reversal or consolidation. The MACD and Stochastics oscillators show different signals. In the medium term, the optimal action would be the deals on the trend, but buy orders can be effective in short-term trading.
