USDCAD Technical Analysis Summary

Market Overview

The USDCAD currency pair experienced a brief surge following the announcement of a 35% tariff on Canadian imports by President Trump, effective August 1. This move was primarily driven by national security concerns related to fentanyl smuggling and a persistent trade deficit.

Price Action Analysis

Initially, the USDCAD rallied above the swing level of 1.3710 and the 38.2% Fibonacci retracement level at 1.37208. However, this bullish momentum quickly faded, leading to a reversal in price action.

After the initial spike, the pair fell back below the 1.3710 level and attempted to retest it during the North American session, coinciding with a stronger-than-expected jobs report. Despite this, the price could not break through the resistance, indicating seller strength at this level.

Technical Indicators

The 100-hour moving average, currently around 1.3682, has been acting as a pivot point in the recent choppy trading environment. Additionally, the 200-hour moving average is rising and approaching the support zone between 1.3649 and 1.3651, where the pair found support in the previous week.

Market Sentiment

The failure to maintain the breakout following the tariff announcement suggests a degree of hesitation among traders, likely influenced by potential exemptions under the USMCA. Until the USDCAD can decisively break above the resistance at 1.3710 and the 38.2% retracement level at 1.37208, or below the support at 1.3649, the market is expected to continue its range-bound trading.