[MownySue]

USD/CAD – The CAD retained a soft bias through the latter part of last week and closed on a rather soft note. Early USD/CAD gains in Asian trade proved short-lived, however, and USD/CAD has slipped sharply to test key intraday support at 1.0560, below the 1.0590/00 level that underpinned the market last week. We look for firm short term resistance now on a spot rebound to the 1.06 zone and feel a little more comfortable with the prospect of the CAD’s recent softness reversing. USD/CAD upside risks have not entirely disappeared, however, and a move above 1.0840, where short term and daily trend resistance points converge at the moment, would be very USD-bullish/CADbearish. The overnight high at 1.0780 is about as good as the USD will do from here though and look for another big figure or so, more or less, off of funds on break through support in the mid/upper 1.05s.