News and Analysis
Posted: Wed Dec 21, 2016 11:04 am
CAD/JPY: short review and forecast
Since November, the rates of CAD/JPY is in the frames of the rapid upward trend. The Canadian dollar strengthened against the yen and in a very short time reached a high level 87-88 CAD, which had been reached before only in April 2016. Although likely, the rates are approaching the peak, and the rapid rise of the Canadian dollar, will be stopped as the US dollar, which has already passed the stage of rapid growth, breaking multi-year highs.
Why this trend has been formed in November? it's not difficult to know. It is not outstanding performance of the Canadian economy, though it shows enviable stability. The strengthening of the Canadian economy happened because of the strengthening of the U.S. dollar, the economy in the United States in General and increasing of the crude oil prices, which gives good preconditions for economic growth of Canada and the entire region. Japan's economy also demonstrates stability. The Bank of Japan gives good forecasts for GDP growth next year, but rising oil prices put pressure on Japan's economy and the value of the yen.
Oscillator MACD Stochastics indicate a good time for opening trades against the trend. When doing short term trading, it is the right decision. But according to forecasts, the yen won't strengthen against the U.S. dollar and other currencies. Therefore, the decreasing will be insignificant and the value of the yen will be approximately on the current level in the next few months.
Since November, the rates of CAD/JPY is in the frames of the rapid upward trend. The Canadian dollar strengthened against the yen and in a very short time reached a high level 87-88 CAD, which had been reached before only in April 2016. Although likely, the rates are approaching the peak, and the rapid rise of the Canadian dollar, will be stopped as the US dollar, which has already passed the stage of rapid growth, breaking multi-year highs.
Why this trend has been formed in November? it's not difficult to know. It is not outstanding performance of the Canadian economy, though it shows enviable stability. The strengthening of the Canadian economy happened because of the strengthening of the U.S. dollar, the economy in the United States in General and increasing of the crude oil prices, which gives good preconditions for economic growth of Canada and the entire region. Japan's economy also demonstrates stability. The Bank of Japan gives good forecasts for GDP growth next year, but rising oil prices put pressure on Japan's economy and the value of the yen.
Oscillator MACD Stochastics indicate a good time for opening trades against the trend. When doing short term trading, it is the right decision. But according to forecasts, the yen won't strengthen against the U.S. dollar and other currencies. Therefore, the decreasing will be insignificant and the value of the yen will be approximately on the current level in the next few months.