March 08, 2022
USD/CAD: The Canadian dollar weakened against the U.S. dollar on Monday as the greenback broadly climbed and extreme volatility in oil prices weighed on Wall Street. The prospect of surging commodity prices hurting economic activity was a drag on investor sentiment. Equity markets globally tumbled, while the safe-haven U.S. dollar rose against a basket of major currencies. Despite that, the Canadian dollar still looks strong. In the event of rising oil prices and the release of strong macroeconomic data on the labor market, the strengthening of the Canadian dollar will continue. Immediate support is seen at 1.28. A breakout below could take the pair towards 1.27.
GBP/USD: Sterling declined against the dollar on Monday as another session sent investors to buy dollars. European currencies have been falling fast since the rise of geopolitical tensions as investors worry about the impact on their economies of the war and the surge in commodity prices. While the UK economy is not as exposed as eurozone economies, the pound has been suffering versus the dollar but powered ahead against the euro. Immediate support is seen at 1.31. A breakout below could take the pair towards 1.30.
EUR/USD: The euro tanked more than 1% versus the dollar on Monday on concerns that higher energy prices will spark stagflation and hammer the European economy as it tries to recover from the pandemic. Europe is the most vulnerable as it imports as much as 40% of its gas from Russia and the single currency has become increasingly correlated with oil prices. The higher oil climbs, the more the euro falls as investors fret about higher inflation and the blow to the economy. This situation is unlikely to change in the near future. Immediate support is seen at 1.0840. A breakout below could take the pair towards 1.08.