One way to check the stability of a government is through its currency value and that is what’s being reflected by the Canadian economy. Despite the bad news coming in from different markets, the Canadian Dollar against other currencies remain to be stable. Well, at least since 2009.
In the chart of the Canadian Dollar vs Japanese Yen (CADJPY), there is a trading range (indicated by the yellow lines) that was formed back in March of 2009. Currently the currency pair is at the 86.00 area and could move just within the range for the next couple of months. However, if the value goes beyond the resistance or support then that’s a different story. A break above the resistance could propel the CADJPY to reach new highs for the year, but then, it needs to surpass the 94.48 price mark (blue line). On the other hand, a break below the current support could slide the value to the next support at 79.92 (red line). If the currency maintains to move within the trading range, then we would see the value to be just around 82.00-94.00.
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