Forex Investment and Currency Trading

Broad USD strength and M&A outflows from Canada have combined to drag USD/CAD decisively higher this morning. With the market well above the recent short term range peaks in the low 1.25 area (now support zone), traders would look for funds to push on towards the mid/upper 1.27s at least in the near term. Trading conditions remain very illiquid and short term swings are liable to remain substantial but traders would expect the underlying trend to remain higher for the moment at least. EUR/CAD gains from the low 1.58s reflect expected M&A related flows (reflecting ING’s sale of its stake in ING Canada, closing on February 19th); Market sees short term resistance in EUR/CAD around the 1.5995/1.60 level, with support now between 1.5900/50. Key resistance above the market stands at 1.6220/30.