USD/CAD Tests Upper End of Its Range as Biden Announces Sanctions on Russia

The dollar moves higher to the upper end of its range against the Canadian dollar near 1.27. US benchmark yields are firmer with rebounding risk appetites. Gold prices rose above $1900 as sanctions create the possibility of supply issues. Rising tensions increased oil and gasoline prices, causing higher inflation. The chance of a 50-basis point rate hike in March has become likely.

Technical Analysis

The USD/CAD tests the upper end of its range against the Loonie. Resistance is seen near a downward-sloping trend line near 1.276. Support is seen near the 50-day moving average near 1.27. Short-term momentum turns negative as the fast stochastic generates a crossover sell signal. The reading prints 72.77.

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

Weekly Mortgage Applications Tumbled to Pre-Pandemic Lows

The MBA mortgage applications fell to more than their two-year lows last week. The Fed’s decision to hike rates in March led to rising mortgage rates. There is reduced demand for loans to purchase homes. The Market Composite Index, a measure of the volume of mortgage loan applications, fell 13.1% from last week, the lowest reading since December 2019.