Forex Investment and Currency Trading

Overnight Spot Trading Activity: No End in Sight
Asia: USD/CAD continued on a march toward 1.3000 in overnight trading, as weak equity and commodity markets remained the catalysts for price direction. The Asian session began with an offered tone, as profit taking flows weighed on price action and took USD/CAD from 1.2765 to 1.2702. However, with the Asian equity markets opening under downside selling pressure, the selloff in USD/CAD quickly lost momentum. Interbank bids prevented a break below 1.2700 and triggered a price reversal to 1.2830 in this regard. Liquidity remained a concern as volatility stayed at elevated levels.
London: The advance [...]

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Massive deleveraging, forced liquidation of positions and repatriation flows back to the US have combined to produce some spectacular adjustments in the global financial markets in the past few weeks. Nobody could have imagined that the markets would accomplish a massive and broad unwinding of the investment themes that have dominated the whole of the last cycle in the space of a few months – or even weeks.
The credit crisis has induced a huge adjustment in a number of different asset classes; tighter credit conditions, higher volatility and the sharp downturn in the prospects for global growth have led or [...]

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In late 2007, USDCAD smashed through to 0.90 due to commodity prices, economic optimism M&A flows, and psychological factors. But the currency has since unwound somewhat since them as commodity prices have eased and Canada economy pessimism grown and as the USD has rebound – in recent weeks USDCAD has been around 1.15 to 1.21.
Oil prices should remain soft as global growth slows and demand destruction kicks in. Other commodity prices, too appear to be heading lower.
Bank of Canada expressed discomfort when CAD was beyond 0.95. With new Governor Carney, the Bank appears less inclined to actively discuss the currency, [...]

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The move in USD/CAD on October 10, 2008 was the second largest daily change in percentage terms on record back to 1951. Only June 1, 1970 was larger, following the decision to float the Canadian dollar and abandon the Bretton Woods system of fixed exchange rates. Fundamentals do not usually change so abruptly. Even so, recent sharp declines in a wide range of commodity prices do demonstrate how quickly CAD fundamentals have changed for the worse.
USD/CAD dramatically rallied on Friday October 10. From a prior close of 1.1458, USD/CAD surged to 1.1818, although it had hit a high of 1.2135 [...]

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USD/CAD rallied sharply overnight as oil prices declined by more than US$3/b, but failed
to break above 1.20.
USD/CAD rallied to a high of 1.1990 in early London trading but drifted back toward 1.1850 into the NA open.
FX Bottom Line: USD/CAD remains subject to global growth concerns, commodity price movements and general risk themes. Price volatility remains high in the current low liquidity environment. Barriers at 1.20 and last week’s high of 1.2097 are key resistance levels, with 1.1687 and 1.1566 the support levels.

Overnight Spot Trading Activity: USD/CAD Pushes Higher After Quick Dip
Asia: After starting the Asia session on a quiet note, [...]

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