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The European Futures market has opened up to a solid flow of orders that have bid the major currencies higher against the Usd, have also bid equity markets higher, and supported the oil and gold cash market moves. In all, the Monday European open has suggested that the market may be able to hold last week's gains, albeit that an overbought reversal to support may have to happen before the next leg is made. Although the market mechanics reveal a well bid arena on Monday, the slightly thin order sizes going through, and light economic calendar, means it may all come down to earning season sentiment to keep things bubbling along.

Eur is getting bid higher against Usd, Gbp, Chf, and Jpy, and gets the Bull Of The Day award in early European trade. Ahead of the Bank of Canada rate decision it will be very surprising to see Cad stay down at these levels for too much longer. The BOC under-estimated growth in last month's GDP read, and were out of sync with the Statistic Canada read that followed their last statement, and that may have allowed Usd/Cad to drop in value. Added to that was the rise in oil prices recently, from a test of support at $55, that has allowed the cad pair to lose value in quick time.

Now the BOC need to offer a way to balance potential growth with an export market that is dominated by a U.S. economy that is in the doldrums, and that may not allow anything to be done with interest rates until nest Spring. Under these circumstances the Canadian economy will need a weaker C$, and not the 1.1100 valuations that are in the market at the moment, if manufactured exports are to be good enough value to help stimulate GDP growth. We are looking for a reversal of Usd/Cad weakness over the coming sessions if oil prices hold under $65.50.

The issue on Monday is the proximity to the previous session highs and lows that most pairs are at. There may not be enough liquidity and market participation in early Monday trade to break and hold, it would seem, what were very strong areas of trade on Friday. The momentum reads still indicate that reduced lot sizes are prudent.