Tensions appear to be flaring between Russia and Ukraine once more, so risk-off flows are in play.
However will a possible oil rally carry the Loonie?
Earlier than transferring on, ICYMI, yesterday’s watchlist checked out EUR/USD’s bearish pullback ahead of the U.S. retail sales and FOMC minutes release. You should definitely take a look at if it’s nonetheless a legitimate play!
And now for the headlines that rocked the markets within the final trading sessions:
Contemporary Market Headlines & Financial Knowledge:
U.S. core retail gross sales jumped 3.3% in January after earlier 2.8% stoop
U.S. headline retail gross sales rose 3.8% vs. projected 2.1% improve
U.S. industrial manufacturing rebounded by 1.4% after earlier 0.1% dip
Canadian headline CPI up 0.9% vs. 0.6% forecast, -0.1% earlier
Canadian core CPI at 0.8% vs. earlier flat studying
Biden administration says extra Russian troops arrived at Ukraine border Wednesday
FOMC minutes acknowledged worth pressures however cautious of overdoing price hikes
France says Iran nuclear deal just a few days away
Australian economic system added 12.9K jobs in January vs. projected flat studying
Australia’s unemployment price unchanged at 4.2% as anticipated
Japanese core equipment orders jumped 3.6% vs. projected 2.0% stoop
U.S. Philly Fed index at 1:30 pm GMT
FOMC member Bullard’s speech at 4:00 pm GMT
New Zealand quarterly PPI at 9:45 pm GMT
Use our new Currency Heat Map to shortly see a visible overview of the foreign exchange market’s worth motion! 🔥 🗺️
What to Watch: USD/CAD
Danger aversion appears to be creeping again into the monetary markets on contemporary fears of assaults between Russia and Ukraine.
Phrase by the grapevine is that extra Russian troops arrived on the border as an alternative of being withdrawn whereas Ukrainian forces are reportedly firing mortars and grenades.
Whereas these headlines sparked one other flight to security that boosted the greenback, the oil-related Loonie would possibly be capable of maintain its floor.
Recall that crude oil staged a powerful rally earlier within the week, as buyers feared that the battle would possibly consequence to manufacturing outages and provide disruptions. In flip, this might immediate one other international power crunch, particularly since demand is beginning to choose up.
If that’s the case, USD/CAD would possibly flip upon hitting the ceiling on the prime of its vary round 1.2785. Stochastic is on the transfer up for now, suggesting that consumers are in management, however the oscillator can be approaching the overbought area.
The 100 SMA is above the 200 SMA, although, so the trail of least resistance may be to the upside. Sustained risk-off flows would possibly spur a bullish breakout from the vary, so I’d preserve my eyes peeled for both reversal or continuation candlesticks on the prime.
Don’t overlook that there are talks of Iran presumably securing a deal to have sanctions lifted, which may imply larger oil output and draw back stress on costs.