- USD/CAD has pulled back to the 1.2750 area after previously testing key resistance above 1.2750.
- The focus remains very much on geopolitics, with US President Biden just announcing new sanctions against Russia.
In choppy trading conditions, as forex market participants watch developments in the rapidly escalating Russia/Ukraine crisis, the USD/CAD rallied to test key resistance level above 1.2750 on Tuesday. Since then, the pair has retraced from session highs of 1.2780 to around 1.2750, where it is now trading sideways on the day and near the center of the 1.2720-1.2780 range. US President Joe Biden has just delivered a speech in which, as expected, he unveiled new US sanctions against Russian banks, sovereign debt and wealthy individuals, joining the UK Kingdom and the EU that had already announced similar measures.
Focus now returns to the ceasefire line between Ukraine and breakaway provinces in the east, where fighting has intensified in recent days, as well as Russian-backed attempts to stage so-called “false flag” events. Russia’s parliament on Tuesday authorized President Vladimir Putin to authorize the creation of Russian military bases in breakaway regions of eastern Ukraine, and as Russian forces continue to build up on Ukraine’s borders, investors fear an invasion of Ukraine is looming. big scale.
This suggests more volatility against types like USD/CAD and technicians will be watching for a possible break above resistance near 1.2800, which could open the door for a push towards December highs above 1.2950. However, one thing to note for USD/CAD is that a full-scale Russian invasion of Ukraine would likely send oil prices soaring on fears of a global supply disruption, which could weigh on the pair. . For the time being, then, USD/CAD is likely to continue to oscillate between recent levels of 1.2650-1.2800 until the geopolitical picture becomes clearer.
Additional technical levels
Source: Fx Street
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