Forex Investment and Currency Trading

USD/CAD remains contained within recent ranges as the market continues to vacillate between risk-seeking and risk avoiding strategies. The underlying trend is lower for USD/CAD overall, if only modestly so in the grander scheme of things, because Canada’s general economic situation – while
weakening – remains relatively better than the US at the moment. Commodity prices have stabilized as global reflation hopes have perked up a little in the past couple of weeks; reaction to the US Financial Rescue Plan will likely determine whether risk is really on or really off but overall, analysts continue to
favour selling USD/CAD rallies and feel that Friday’s failure to really punish the CAD for a shockingly bad employment report indicates a rather firm underlying bid for the currency at the moment. Expect short term support in the low 1.22s and resistance in the mid/upper 1.23s from here. Key resistance on the topside is 1.2540/50. Bank of Canada Governor Carney will hold a briefing on the economy for parliamentarians this morning; lawmakers are thought likely to focus on the central bank’s assumptions that the economy will recover strongly in 2010.