• The price has formed a weekly pennant and the rising wedge could be subject to a breakout.
  • Russian invasion could occur within 48hrs according to the US, risk-off is hurting high beta currencies. 

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 48hrs. 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:

USD/CAD daily chart

From a technical perspective, the picture is no clearer given the price is stuck between a sideways daily channel as follows:

1.2640 is a key support level that guards a break of critical weekly structure.

USD/CAD weekly chart

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 the figure:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

EUR/USD remains sidelined below 1.0600 ahead US data

EUR/USD remains sidelined below 1.0600 ahead US data

EUR/USD is trading close to 1.0600, keeping its range play intact. The US dollar stays sluggish amid a better mood, awaiting the CB Consumer Confidence data. The euro shrugs off the ECB commentary on the new anti-fragmentation tool. 


GBP/USD ranges below 1.2300 amid sluggish USD, US data eyed

GBP/USD ranges below 1.2300 amid sluggish USD, US data eyed

GBP/USD is moving back and forth in a familiar range below 1.2300, lacking a clear directional bias amid a muted US dollar index and risk-on sentiment. Ongoing Brexit and UK political woes remain a drag on the pound. US data eyed. 


Gold bears eye $1,820 and $1,816 as next targets

Gold bears eye $1,820 and $1,816 as next targets

Optimism prevails, pointing to a turnaround Tuesday for the financial markets, as the previous week’s upbeat global momentum returns and caps the broad US dollar recovery. Investors remain wary ahead of the key NATO Summit.

Gold News

Former Ripple CTO is dumping millions of XRP, traders beware

Former Ripple CTO is dumping millions of XRP, traders beware

XRP price shows promise that it is ready to trigger a massive run-up as the first half of the year comes to an end. There are three reasons why investors should be bullish on Ripple.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!