Forex Investment and Currency Trading

USD/CAD – The move up from last week’s low remains intact but it is a grind and, as we saw late yesterday, prone to some fairly sizeable setbacks. Failure at 1.0584 yesterday is a modest strike against the USD at the moment and will become more of a hurdle if spot cannot improve on that quickly. The overhead resistance is firming up in the upper 1.05/low 1.06 area. Intraday, support stands at 1.0490/95 and a break below this support zone this morning could see USD/CAD tumble fairly quickly. Note a small open gap on the hourly chart that will have to be filled at some point (1.0340/60), a zone that constitutes interim support. A push under 1.0490/95 this morning may see spot drop as low as 1.0280/90 in the next few days.

EUR/CAD – Back to the 61.8% retracement resistance stemming from the late September slide this morning; again,  it’s not convinced that the cross has much medium term upside potential in the light of the scale of the sell off from the 1.61 area but equally, some are a little surprised that the bounce in EUR/CAD has extended as far as it has this week. The mid 1.58 area should provide stronger resistance from a medium term point of view but not confident enough at the moment.

GBP/CAD – After a very poor run, Sterling/Canada now looks bid, no lid. While channel resistance in the low 1.47 area continues to cap interday but the short term moving averages (MAs) are responding to this week’s sharp rise and showing a bias to turn higher. As we saw in August though, more positive MA positioning is no guarantee of a sustained move up in the GBP. If Sterling can make it through the low 1.74 area on a daily close basis, we may well see a run to the 1.80 level, however.

CAD/JPY – The CAD losses slowed in the upper 85 area yesterday, close to where we expected good support to emerge. Key short term support has dropped to 85.50/60 today (55-day MA and the Ichimoku cloud chart support). Good support intraday for the CAD and a firm-ish close leaves the cross in a positive (for the CAD) position despite initial losses today. While spot holds above 85.50, we look for a rebound to 88; key resistance above there is 90.