The price of crude oil jumped in the overnight session as investors continued focusing on the ongoing tensions between the US and Russia. The US accuses Russia of attempting to invade Ukraine again. The last invasion happened in 2014 when the country annexed Crimea. The events are positive for oil prices because Russia is the third-biggest oil producer in the world and the US is considering adding sanctions to the oil industry. Brent, the global benchmark, rose above $90 for the first time in over seven years even after the rising US inventories. According to the Energy Information Administration, inventories rose to over 2.37 million barrels in the previous week.
The Canadian dollar declined against key currencies after a surprise interest rate decision by the Bank of Canada (BOC). The bank caught investors off-guard as it decided to leave interest rates unchanged at 0.25%. Before the meeting, most analysts were expecting the bank to hike interest rates by about 25 basis points. Recent data by Statistics Canada showed that the country’s inflation surged to a 30-year high of 4.8%. In its statement, the BOC said that it expects inflation will remain at the current range this year.
The US dollar rose slightly after the Federal Reserve decision. Like the Bank of Canada, the Fed decided to leave its interest rate unchanged between 0% and 0.25% in its first meeting of the year. It also hinted that it would end its quantitative easing program in March and then immediately start a period of tightening. Analysts expect that the bank will implement about three rate hikes this year considering that the American economy is doing well. For example, data published on Wednesday showed that he country’s new home sales jumped to 811k in December. Last week, data revealed that building permits and housing starts also rose.
EURCAD
The EURCAD pair has been in a downward trend in the past few days. The pair has managed to drop from a high of 1.4373 to a low of 1.4165. It tilted upwards after the latest interest rate decision by the Bank of Canada. On the four-hour chart, it is slightly below the 25-day and 50-day exponential moving averages and the 23.6% Fibonacci retracement level. Therefore, the cross will likely keep falling as bears product that the BOC will be more hawkish than the ECB.
XBRUSD
The XBRUSD pair has been in a strong bullish trend in the past few months. The pair managed to cross the key resistance level at 90. It also crossed the important resistance level at 88.77, which was the highest level this year. It is above the 25-day and 50-day moving averages while oscillators have continued rising. Therefore, the pair will likely keep rising as geopolitical risks remain.
EURUSD
The EURUSD pair continued its downward trend after the Fed decision. The pair declined to a low of 1.1282, which is significantly below this month’s high of 1.1485. It is below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) is hovering above the oversold level. Therefore, the pair will likely continue retreating as bears target the key support at 1.1400.
