USD/CAD Breaks Out of Its Range as Russia Invades Ukraine

The dollar finally broke out of its range to 1.28 against the Canadian dollar, its best level of the year. US benchmark yields sharply declined but then stabilized. The 10-year yield dipped to 1.85% but climbed back to 1.92%. Gold prices rose to above $1975, their highest level in over a year. Investors are attracted to safe-haven assets. Geopolitics overshadowed economic data today.

Technical Analysis

The USD/CAD breaks out of the upper end of its range 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 positive as the fast stochastic generates a crossover buy signal. The reading prints 76.43. 

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 MACD signal line (the 9-day moving average of the MACD line). The MACD histogram prints in positive territory with an upward sloping trajectory.

Weekly Initial Jobless Claims

Last week, weekly jobless claims came in less than expected, totaling 232,000.  Continuing claims, totaling 1.48 million, dropped to their lowest level since March 14, 1970. Broader economic data shows improvements. GDP was revised to increase at a 7% annualized pace in the fourth quarter, the fastest pace since 1984.