Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The Canadian dollar was trying to strengthen against its US counterpart on Wednesday as global financial markets started off calm in Asia. However, risk sentiment flipped on its head with investors waiting to see Russian President Vladimir Putin’s next move after he sent troops into separatist regions of Ukraine.
The news fell in just after the opening on Wall Street that Ukraine had planned to declare a state of emergency after warnings from the US that Russia will invade within 48 hours.
Further reports enhanced the risk-off moves that cited convoys of military equipment moving towards Donetsk in eastern Ukraine from the direction of the Russian Frontier.
Additionally, the price of oil has rallied on the news that the US will sanction the company building Russia’s Nord Stream 2 pipeline. This leaves the outlook for CAD uncertain considering the high beta status it holds to global equities, commodity prices and specifically to oil:
From a technical perspective, the picture is no clearer given the price is stuck between a sideways daily channel. 1.2640 is a key support level that guards a break of critical weekly structure. However, the weekly chart may hold some clues:
The price has formed a pennant and given the current trajectory to the upside, the bias would be for a bullish breakout. However, when scaling out, the broader trend is bearish and the rising wedge could be subject to a breakout to target as low as 1.23.
