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USD/CAD Moves Lower as the US and Europe Increase Sanctions on Russia

By:
David Becker
Updated: Feb 28, 2022, 17:38 UTC

USD/CAD dips as US benchmark yields pull back.

USD/CAD Moves Lower as the US and Europe Increase Sanctions on Russia

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The dollar retreated to 1.267 against the Canadian dollar as the US expands new sanctions on Russia. US benchmark yields tumbled as the 10-year yield fell 12 basis points. Palladium prices rose as sanctions created concerns about a supply deficit. Gold prices increased by 1.8% as the safe-haven metal remains a store of value. Investors will monitor Fed Chair Jerome Powell’s testimony this week to indicate how the Russia-Ukraine crisis will impact rate hike plans.

Technical Analysis

The USD/CAD moved lower against the Loonie. Support is seen near the 10-week moving average near 1.27. Resistance is seen near the 200-week moving average near 1.31. Short-term momentum is negative as the fast stochastic is generated a crossover sell signal. The reading prints 50.33. 

Medium-term momentum is negative as the MACD (moving average convergence divergence) index generated a crossover sell signal. The MACD line (the 12-day moving average minus the 26-day moving average) converges to the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram is printing in negative territory with a downward sloping trajectory.

Chicago PMI Below Expectations for February

The Chicago PMI declined by 8.9 points from 65.2 to 56.3 in February. The consensus was 63. The steep decline suggests an economic activity slowdown as it is the first decline since November 2021. All five leading indicators moved lower, led down by new orders and supplier deliveries. New orders fell 12.3 points, slowing to a 20-month low of 53.0 points. 

About the Author

David Becker focuses his attention on various consulting and portfolio management activities at Fortuity LLC, where he currently provides oversight for a multimillion-dollar portfolio consisting of commodities, debt, equities, real estate, and more.

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