USD/CAD advances but retraces below 1.2600 on Ukraine-Russia conflict

• The USD/CAD grinds higher in the North American session, up some 0.38%.
• The Russian-Ukraine war weighs significantly on sentiment, as NATO/US officials warned that the conflict could extend for years.
• USD/CAD Price Forecast: The pair remains downward biased, but a daily close above 1.2600 would add upward pressure on the USD/CAD.

The USD/CAD is recovering some ground and aims to break above the 200-DMA, but retreated late in the North American session, amidst a risk-off market sentiment that dragged the pair below the 1.2600 mark. At the time of writing, the USD/CAD is trading at 1.2589.

Easter Europe geopolitical issues, particularly the Ukraine-Russo war, keep weighing on the mood. Nevertheless, risk appetite increased, with US equities fluctuating, as the US Senate unanimously backed a legislation banning oil imports from Russia.

Meanwhile, NATO and US officials warned that the war in Ukraine might last for weeks or even years, while Kyiv’s Foreign Minister pleaded for urgent military assistance so that Ukraine could make a difference in its fight with Russia.

Reports from the Kremlin reported that Russian President Putin discussed peace talks with the Russian security council and the military operation in Ukraine, as reported by RIA.

An absent Canadian economic docket keeps USD/CAD traders adrift to US Data. However, Canadian employment figures would grab the headlines on Friday, with the Employment Change for March expected at 80K. The Unemployment Rate for the same period is likely to drop toward 5.3%.

On the US front, the economic docket revealed Initial Jobless Claims for the week ending on April 2, which came at 166K less than the 200K expected.

USD/CAD Price Forecast: Technical outlook

The USD/CAD entered the Thursday session as neutral-downward biased, but after the Fed minutes, it reacted upwards. During the session, the USD/CAD briefly tested the 200-day moving average (DMA) at 1.2617, retreating afterward back below the 1.2600 figure. On its way south, USD/CAD bears reclaimed the March 3 daily low-turned-resistance at 1.2587, and it’s worth noting that the Relative Strength Index (RSI) at 49.43 remains below the 50-midline, despite the steeper 131-pip USD/CAD rally.

The USD/CAD first support level would be 1.2532. A breach of the latter would expose the 1.2500 mark, followed by March 25 daily low at 1.2465.

Upwards, the USD/CAD first resistance would be 1.2600. Once cleared, the next resistance would be the 200-DMA at 1.2617, followed by the February 10 daily low turned resistance at 1.2636, followed by the confluence of the 50 and 100-DMAs at 1.2667 and 1.2687, respectively.