Forex Investment and Currency Trading

The CAD has regained a little ground this morning as risk appetite improves. Oil prices have recovered a little to add to the CAD underpinning but after the recent shake out in equities and with some event risk ahead still – beyond today’s US GDP data, the FOMC meeting next week looms very large – scope for a CAD bounce may be limited at the moment, even if traders also think that the CAD sell off has been overdone after the constant stream of comment from BoC Governor Carney over the past few days. The rebound in the USD has taken the spot market through some important short term technical resistance points and the near term risk still appears to be geared towards the CAD slipping back a little more. Month end flows are expected to be CAD-supportive, which may temper near term losses, however, and we still reckon with the high risk of a year-end sell off in the USD broadly, to reflect the pattern of the past few years. The short term CAD trend remains soft but might not extend that far and the odds of a significantly higher CAD are strong in the next few weeks, in other words. Technically, there is little obvious resistance above the market between current spot levels and the mid/upper 1.09 area.