Should I upgrade Graphics Card or CPU (Phenom X4 or AMD 6950 1gb)

My specs:

Windows 7 Ultimate
ASUS M4A88T-M/USB3
AMD Phenom II X4 965 3.4 ghz (no overclock)
AMD Radeon 6950 1 gb
6 GB RAM DD3
23.5" Samsung 1920 x 1080

I feel like something is not running at optimal performance. I can only upgrade one or the other. CPU or GPU?

If CPU, what i5 and motherboard should I get?
If GPU, what GPU should I get?

The computer is mainly for gaming and blurays. I want maximum performance for CryEngine 3 games and Frostbite 2 games. (Crysis 3 and Battlefield 3)

My budget is approximately 400 CDN but I need best bang for the buck of course.

I would appreciate any advice as this place is the leading authority on tech.

Thank you