[Calxy]

USD/CAD – The USD slipped steadily lower through the remainder of the session Monday, forming a bearish outside range session in the process (higher high, lower low and lower close – back under the 55-day MA). Intraday USD strength is struggling to better the low 1.09 area and we look for short term resistance to remain firm in this area for the moment. We spot key short term resistance now at 1.0990/00 (significant short term trend change above here), around yesterday’s peak, and still prefer to look upon modest USD gains as a selling opportunity. We spot short term support – likely pivotal – around 1.0790/00 (yesterday’s low and a small gap on the chart from last week); below here and the USD slide may pick up a little more momentum again for a retest of the lower end of the current 1.06/1.11 range. We think the balance of seasonal risks will be running quite strongly in favour of more marked USD weakness in the next 4-8 weeks based on patterns of price behaviour in recent USD/CAD “down” years.

EUR/CAD – We noted yesterday that the trend higher in the cross may be tiring and subsequent price action supports that assertion; the EUR failed to hold the move above the 200-day MA (1.5993 currently) yesterday and the market formed an important reversal signal Monday (higher high, lower low and lower close) against the 76.4% retracement resistance. After the extended run higher in spot through August and September, we are inclined to label this a “key reversal” session for the cross. We think the bias is lower from here in the short term – at least – towards 1.5750 and we look for firm resistance now on modest EUR gains towards 1.59/1.60. Sell rallies.

GBP/CAD – Sterling made a fresh short term cycle low today and despite the intraday rise in spot, which might portend to a short-term stabilization in the move lower, there is little or nothing on the daily chart to suggest that the underlying weak trend is turning higher at the moment. The 1 and 6 hour candle charts do suggest some potential for the rally to extend above 1.7450 – precisely what spot needs to do by the close of trade today to put in a more obvious daily reversal. The GBP still looks to have a bit of a struggle on its hands on this front.

[MownySue]

USD/CAD – The daily technical picture remains negative for the USD, with the USD encountering decent selling pressure overnight and breaking under the noted short term pivot highlighted yesterday at 1.0790/00 in London dealing. Intraday gains in USD have been largely contained to this area and we look for a renewed attempt on the downside in the very short term now. Short-term (1-hour) charts are turning negative following the rejection of the 1.08 area this morning and point to further short term downside pressure on funds; bigger picture, weekly price action is shaping up to be potentially negative as well (albeit it with a couple of days to go still). We look for firm resistance in the 1.08 and for the markets to retest the recent range lows in the 1.0600/30 area shortly. We still prefer to sell rallies.