![](https://agilityforex.com/wp-content/uploads/2022/03/2mar22-oil.jpg)
Source: Maxpixel.net
- Oil prices soar after SPR release, Biden speech, underwhelms
- ADP Employment rises more than expected
- US dollar opens higher, EUR underperforms
FX at a Glance 24 hours
![](https://agilityforex.com/wp-content/uploads/2022/03/2Mar22-Agility-1024x458.jpg)
Source: IFXA Ltd/RP
USDCAD Snapshot: open 1.2711-15, overnight range-1.2686-1.2743, close 1.2743
USDCAD is a ping-pong ball in the context of geopolitics and oil prices, while trapped in a 1.2650-1.2850 band. Global risk sentiment soured (again) yesterday after the Russian military targeted civilians, which drove USDCAD to 1.2750. The currency pair traded narrowly in Asia but inched lower in Europe, as traders couldn’t ignore the surge in oil prices. USDCAD continued lower in early NY trading as traders could not ignore surging oil prices.
WTI oil spiked to $112.45 in NY, extending the overnight rally due to escalating supply disruption fears, due to the Ukraine conflict and ongoing Iran nuclear talks. Yesterday, the US and allies released 60 million barrels of oil from their Strategic Petroleum Reserves. The news was greeted with scorn as 60 million barrels is literally a “drop in the barrel” the world uses 100 million barrels every day.
Opec is not expected to pump more oil than its previously announced 400,000 b/day increase. The cartel meets today to discuss how they can use their windfall profits to buy cheap Russian assets.
The Iran nuclear talks continue to drag on and until there is a deal, the world is deprived of around 3-4 million barrels of Iranian crude.
The Bank of Canada (BoC) will not surprise anyone when it raises the overnight rate by 0.25% at this mornings meeting. Policymakers have said they are normalizing policy following the economic recovery from the pandemic and it is unlikely that the Russia/Ukraine conflict cause them to change their thinking. There is not a press conference after the meeting.
USDCAD technical outlook
The intraday USDCAD technicals are neutral inside the well-defined 1.2650-1.2850 range. The intraday technicals are bearish below 1.2770, looking for a break of support in the 1.2640-50 zone to extend losses to the 1.2490-1.2500 area. A break above 1.2870 targets 1.3000.
For today, USDCAD support is at 1.2640 and 1.2590. Resistance is at 1.2750 and 1.2780. Today’s Range 1.2650-1.2750
Chart USDCAD daily
![](https://agilityforex.com/wp-content/uploads/2022/03/2Mar22-usdcad-1024x467.png)
Source: Saxo Bank
G-10 FX recap and outlook
The Russian invasion of Ukraine is wreaking havoc across global financial markets. Vladimir Putin has usurped North Korea’s Kim Jung-un as the world’s resident nut-bar, and he is threatening the stability of Europe.
Western governments reacted to Putin’s actions by imposing a slew of sanctions to cripple the Russian economy. However, they have stopped short of banning Russian oil and gas imports. Russian energy is the main energy source for Europe (Germany in particular), and they do not want to show solidarity for Ukraine by inconveniencing themselves.
Many western governments have banned Russian flights in their airspace. If they really wanted to make a point, it would have been more effective to ban Russian flights over Ukraine airspace, enforced by NATO.
President Joe Biden’s State of the Union address did not even come close to providing the entertainment value of his predecessor’s speeches, even after Biden became confused between “Iranian and Ukrainian.” He blathered on about the heroism of the Ukrainian people but didn’t offer military assistance. And he has a plan to fight inflation. He doesn’t want to lower wages but wants lower costs. “Wow!
Fed Chair Jerome Powell will tell Congress how the FOMC will fight inflation today. In his prepared remarks he said, “With inflation well above 2% and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month.” He didn’t specify the size of the increase and the market has backed off expectations for a 0.50% rate hike.
Asia equity markets closed mixed. Japanese and Chinese indexes closed with losses while rising commodities lifted Australia’s ASX200. European bourses and Wall Street futures are in positive territory but have given back some earlier gains, while gold prices moved lower. The US 10-year Treasury yield is 1.768%.
US ADP employment rose 475,000 in February, and January’s data was revised higher to 509,000. The news was greeted with a yawn as Fed Chair Powell already suggested a March rate hike was likely.
EURUSD retreated to 1.1060 from 1.1135 due to the Russian/Ukraine war but found a modest bid after EU inflation (HICP) rose 5.8% y/y in February, higher than the 5.4% expected and the previous and previous 5.1% y/y reading. It appears inflation will stick around. The German Bundesbank warned predicts inflation will average 5.0% this year. EURUSD bounced to 1.1108 in NY.
GBPUSD is tracking EURUSD moves and rallied from its overnight low of to 1.3273 to 1.3347in NY. The Bank of England remains on track to hike rates according to a couple of BoE policymakers.
USDJPY is at the top of its 114.80-115.42 range supported by steady Treasury yields and with prices reduced JPY safe-haven demand.
AUDUSD rallied to 0.7281 from 0.7245 after Q4 GDP rose 3.4%, compared to the forecast for a 3.0% gain. Rising commodity prices provided additional support.
Chart of the Day: WTI oil weekly
![](https://agilityforex.com/wp-content/uploads/2022/03/2mAR22-oIL-1024x490.png)
Source: Saxo Bank
FX open, high, low, previous close as of 6:00 am ET
![](https://agilityforex.com/wp-content/uploads/2022/03/2Mar22-LV-1024x647.jpg)
Chart: Saxo Bank
China Snapshot
Today’s Bank of China Fix 6.3351 previous 6.3014
Shanghai Shenzhen CSI 300 fell 0.89% to 4,578.60
Chart: China 1 month
![](https://agilityforex.com/wp-content/uploads/2022/03/2Mar22-china-1024x520.jpg)
Source: Saxo Bank