CAD Keeps Outshining the Others| Influencer‘s Insight •Jasper Lo

USD has been thriving with an increase of DXY by 2.64% from early this year as expected. Although it has not outshone all its counterparts, the prospect of USD is bullish. Based on the latest statistics of Commodity Futures Trading Commission (CFTC), the scale of net short positions held by speculators has plunged to a three-year low since June 2018 over the last week, an indication of retreating from the market conducted by traders who are unenthusiastic about USD.

It is only CAD itself that has outperformed USD when compared to its major rivals, becoming an outstanding currency. CAD/USD has embraced a growth of 1.5% while CAD/JPY has increased significantly by 7.55% since early this year for JPY is weak. The figure for the latter currency pair would skyrocket by 12.36%, provided the calculation on the last 12-month basis. The strong momentum of CAD is definitely associated with the continuous rise of oil prices in the past but the other supportive factors.

The bullish trend of CAD is not subject to a resurgent pandemic at home mainly due to the rapid growth of oil prices over the last year, which has fueled the comprehensive increase of economic returns on the energy exports of Canada, leading to its relatively satisfactory economic statistics released recently. For instance, the unemployment rate in March published last Friday (April 9th) plummeted from 8.2% to 7.5% while the employed population increased from 25.92 million to 30.31 million in the month, giving a glimpse of Canadas well-performed economy.

On the other hand, property prices in the country soared by 25% in February, even up to 35% in some popular cities, which was a strong increase. As such, the financial market predicted that the Bank of Canada boasts a chance to release signals of its hawkish monetary policies at the April 21st conference, maybe implying that a reduction to buying bonds is upcoming and that Canada will become the first major industrial power to announce its delisting.

Therefore, influenced by the favourable factors mentioned above, the signals of hawkish monetary policies released by the Bank of Canada round the corner is expected to see the hype in the market before next Wednesday (April 21st), paving way for the growth of CAD/USD and CAD/JPY. In my opinion, if the speculation hype is transient, CAD/JPY should be prioritized as its previous resistance level at 88.304 is predicted to embrace a breakout chance and march towards that at 89.214 in October 2018. In the long run, I am confident to challenge the double-top resistance level at 91.578 in September 2017 and January 2018.