Two trades to watch: USD/CAD, FTSE

USDCAD falls for a fourth day as oil rallies

USDCAD is falling for a fourth straight session on Friday, boosted by surging oil prices.

Oil prices jumped over 8% yesterday and are up again around 2% heading to the European open after the IEA warned over the loss of Russian oil supply from next month.

Reports that Russia Ukraine peace talks are stalling are also boost oil prices amid fears of further sanctions.

Canadian retail sales data is due later and is expected to show that sales jumped 2.4% MoM in January after falling -1.8% in December as Omicron spread. Strong sales after hot inflation numbers and a strong labour market could ramp up pressure on BoC to raise interest rates again.

The USD is rising versus its significant peers but trades around a weekly low in the week that the Fed hikes rates, which prompted a buy the rumor sell the fact response.

There is no high impacting US data, but the Biden Xi call will be in focus

Where next for USDCAD?

USDCAD has been trading in a range of 1.2650 – 1.28 since late January. The pair has broken below the 50 SMA and down below 1.2650. The RSI supports further downside.

The pair is testing support at 1.26 a horizontal support and the 200 sma. A break below here could open the door to 1.2555 the January 26 low, 1.25 the January 21 low, and on to 1.2450, the 2022 low.

On the flip side, a move back over 1.2650 could see the 50 sma at 1.2690 exposed as the pair then looks towards 1.2850.

FTSE eases but is set for weekly gains

The FTSE, along with its European peers, is heading lower as the mood in the market sours. Even so, the FTSE is still set to gain over 2% across the

The surging oil prices and peace talks which appear to be making little headway, are unnerving the markets.

Rising oil prices are offering at least some support to the FTSE, thanks to the oil majors.

Talks have entered a fourth straight day, and there has been little tangible progress. Optimism from earlier in the week is fading.

Amid a quiet economic calendar, Russian developments will be in focus in addition to Biden’s call with Xi Jinping, where he is expected to warn China over supporting Russia.

Where next for FTSE?

The FTSE has extended its rebound from 6760, the March low. The move above the 200 SMA and the bullish RSI are keeping buyers optimistic of further gains.

The price has run into resistance at the 50 sma just over 7400 for a second time; a move above here is needed for buyers to then target 7575, a level which offered resistance across the end of February.

Failure to retake the 509 sma could see the price slip back to 7240 the 200 sma. A move below 7050 horizontal support opens the door to 7000 the psychological level.

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