USD/CAD Remains Little Changed Amid Russia-Ukraine Peace Talks 

Insights

• The dollar fell amid peace talks, losing its safe-haven appeal
• Benchmark yields moved lower on jobs data signaling inflation
• Gold and silver prices fell amid positive peace talks 
• Oil prices fell as investors anticipate a positive direction of peace talks between Russia and Ukraine and an easing of sanctions

The dollar traded flat against the Loonie in today’s trading session. Benchmark yields dropped several basis points on jobs data signaling a torrid labor market and mounting inflation. The dollar declined against other major currencies today as Russia-Ukraine peace talks reduce the dollar’s safe-haven appeal and boost the Euro, which has been hit hard this month due to geopolitical conflict. Risk appetite is returning to the market. Gold prices and other metals tank as easing tensions increase investors’ risk appetites and lessen the appeal of safe-haven assets. Oil prices moved lower as Russia and Ukraine peace talks seemed to move forward, and the Shanghai lockdown put downward pressure on prices. 

Tuesday’s jobs report indicated that 4.4 million people quit in February, a near-record high. Job openings remained little changed from the previous month at 11.4 million. Expectations were for 11.1 million openings. People are switching to jobs that offer higher pay. Since employers are desperately looking for employees, wages increased by 4.5% in 2021. Fed Chair Powell has stated that the Fed aims to reduce the number of job openings available to cool down inflation and wage increases. 

Technical Analysis

The USD/CAD slightly declines today after snapping a nine-day losing streak yesterday. Downward pressure on the currency pair is expected. The return of risk appetite to the market will continue to weigh on the dollar. Resistance at the recent breakdown near 1.261 should cap gains. Support is seen at the horizontal trendline near the January lows of 1.245. There will likely be a break below this support level in the near term. Resistance is seen near the recent breakdown level near 1.261. Short-term momentum turns negative as the fast stochastic had a crossover sell signal.

The medium-term momentum is negative as the MACD line generated a crossover sell signal. This scenario happens when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints positively. The trajectory of the MACD histogram is downward sloping, which likely points to downward prices.