USDCAD Technical Analysis Summary
Date: June 30, 2025
Market Reaction to Trade Talks Cancellation
On Friday, President Trump canceled trade talks with Canada due to the country's proposed Digital Services Tax aimed at American tech companies. This decision led to a sharp decline in the Canadian dollar, causing the USDCAD exchange rate to rise significantly. Analysts interpreted this move as a strategic tactic by Trump to pressure Canada into retracting the tax in exchange for avoiding new tariffs.
Canada's Rescission of the Digital Services Tax
Over the weekend, Canada rescinded its Digital Services Tax, which was anticipated by analysts. This decision aimed to facilitate broader trade negotiations with the U.S. Following this announcement, the USDCAD price retraced some of its previous gains, moving below the 100 and 200-hour moving averages (MAs), indicating a bearish technical bias.
Current Technical Analysis
During the Asia-Pacific session, the USDCAD attempted to rise but encountered resistance at the 100-hour MA, currently at 1.36887. The price subsequently declined following the announcement of the tax rescission, reaching a low near a swing area between 1.3633 and 1.3650, but rebounded before hitting that level.
In the European session, the price corrected higher but remained below the falling 100-hour MA. For a bullish outlook, the price must break above and sustain levels above both the 100-hour MA and the 200-hour MA at 1.37033. If the price fails to do so, sellers are likely to target the swing area between 1.36337 and 1.36505. A break below this level would further increase the bearish sentiment in the market.
USDCAD Technical Chart
Conclusion
The recent developments in trade negotiations between the U.S. and Canada have significantly impacted the USDCAD exchange rate. The technical indicators suggest a bearish bias unless the price can reclaim key resistance levels. Traders should monitor these levels closely for potential trading opportunities.