Forex Investment and Currency Trading

• USD breaks below key support levels against the major currencies.
• USD/CAD tests 0.9979 after EUR/USD moves to new all-time highs.
• Resistance at 1.0027 and 1.0052 is expected to contain valuation-driven retracements for a move to short-term support at 0.9971 and 0.9932.

Asia: USD/CAD broke below parity overnight as the USD moved to a new all-time low versus the EUR and the DXY pierced a key support level at 72.10. USD/CAD actually managed to produce a mild rally in early Asian trading, as light short covering flows took the pair from 1.0055 to 1.0071. However, with crude oil prices remaining firm and the greenback staying under pressure as equity markets continued to wilt (especially financial stocks), the rally soon lost momentum and interbank selling pressure caused a selloff to 1.0047 to end the session.

London: Bearish sentiment defined the London trading session as EUR/USD traded to a new all-time high above 1.6018. This attracted additional selling pressure in USD/CAD that pushed prices below the 1.0020 level. Fund accounts soon joined the fray, leading to a break below parity. After reaching a low of 0.9999, interbank short covering caused a return to 1.0014. Fund buying interest was offset by interbank selling pressure between 1.0000/1.0010, with the resulting break below support at 0.9991 taking prices down to a low of 0.9979 as the USD retained an offered tone against the major currencies and crude oil prices advanced by $1/bl to 146.18.