FX.co ★ Markets are mixed because of the conflict in Ukraine and Powell's speech in the Congress

Trading in Europe is mixed because of the ongoing conflict in Ukraine. But the speech of US President Joe Biden in the Congress definitely showed that neither the United States nor NATO are going to take part in the issue, so the markets were held back from continuing the widespread sell-off seen recently.

Today, Powell will make another speech, but this time it is about the central bank's plan on monetary policy. His statements may hint at a softer approach than previously expected, largely because of the situation in Ukraine.

Before, markets were sure that the Fed will raise rates by 0.5% at its March meeting, but with the increased geopolitical tension, things may change as the sharp rally in energy prices could trigger serious economic problems.

The market now believes that the Fed will smoothly raise interest rates by 0.25% at each meeting this year, but at what level it will stop is uncertain. That is why every word of Powell should be carefully considered.

The ADP will also release an employment report today, and many expect to see a 378,000 increase in new jobs for February. If the numbers do not disappoint or turn out to be higher than expected, demand for dollar will soar.

Forecasts for today:

EUR/USD is trading below 1.1120 in anticipation of Powell's speech and US employment data from ADP. But among these events, the speech of Powell will have more weight as his statements will make it clear if the central bank will raise rates gradually. If that happens, then demand for risky assets will soar, and the pair will have a chance to hit 1.1225.

As for USD/CAD, the decision of the Central Bank of Canada to raise the interest rate from 0.25% to 0.50% may cause the pair to dip to 1.2635.