Forex Investment and Currency Trading

USD/CAD’s sell off was starting to look like it was losing momentum late yesterday, when the CAD was showing the first real signs of potential softness against the big dollar in a while. The USD popped up through the upper 1.09 area overnight before slipping back again; the broader trend against the currency remains deeply entrenched still and corrections remain very shallow and short-lived. Firm commodities should give the CAD a little short term support sentiment-wise a least and the press is noting that with oil prices firming again, some tar-sands projects are looking viable once more. This will be a positive for Western Canada and may see renewed foreign investment interest in the sector. There is no Canadian data today and only second-tier US data releases so flows will likely dominate our session. The proximity of the BoC FAD may make the market a little reluctant to lift the CAD too aggressively in the short term but the inkling of a USD rebound that appeared late yesterday has been snuffed out this morning, it would seem. The 6-hour bar chart shows very strong resistance in the short term now at 1.0990/1.10 (overnight highs peaking near the former short term channel base) . We suspect that USD sellers, who had been waiting for better levels to execute, will see the upper 1.08 area as a decent risk/reward zone for short positions intraday. Key short term support is 1.0780/90.