Trump’s Tariffs on Canada: USD/CAD Remains Volatile
Trump’s Tariffs on Canada: USD/CAD Remains Volatile
We are witnessing a surge in market volatility (as reflected by the upward trend of the ATR indicator), influenced by the following factors, according to Reuters:
→ Trump’s Tariffs. On Tuesday, new 25% import duties on Mexico and Canada came into effect, while tariffs on Chinese goods were doubled to 20%.
→ Donald Trump’s first speech in Congress since taking office. In it, the US president made significant statements, including the announcement of new tariffs.
The US Dollar Index initially rose during Trump’s speech but later weakened to a three-month low. In theory, higher tariffs are positive for the US dollar. However, investors are looking beyond short-term safe-haven flows and are concerned about slowing US economic growth and the risk of stagflation.
Why Is Trump Imposing Tariffs?
Officially, US President Donald Trump is introducing tariffs on Canada to combat the "extraordinary threat" to US national security posed by uncontrolled drug trafficking.
However, according to Canadian Prime Minister Justin Trudeau, Trump’s tariffs are aimed at weakening Canada’s economy—or even pushing it towards collapse—so that the US could more easily annex Canadian territory.
Technical Analysis of USD/CAD
In our previous USD/CAD analysis, we highlighted key levels:
→ Resistance at 1.44600
→ Support at 1.43600
New chart data shows that bulls attempted to break through the 1.44600 resistance level, but the price failed to hold above the psychological barrier of 1.45000. Support at 1.43600 remains relevant for now.
Bulls may attempt another push upwards if the price retraces to the lower blue trendline. However, whether this scenario plays out will largely depend on the broader fundamentals related to Trump’s tariffs on Canada, Mexico, and China.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
We are witnessing a surge in market volatility (as reflected by the upward trend of the ATR indicator), influenced by the following factors, according to Reuters:
→ Trump’s Tariffs. On Tuesday, new 25% import duties on Mexico and Canada came into effect, while tariffs on Chinese goods were doubled to 20%.
→ Donald Trump’s first speech in Congress since taking office. In it, the US president made significant statements, including the announcement of new tariffs.
The US Dollar Index initially rose during Trump’s speech but later weakened to a three-month low. In theory, higher tariffs are positive for the US dollar. However, investors are looking beyond short-term safe-haven flows and are concerned about slowing US economic growth and the risk of stagflation.
Why Is Trump Imposing Tariffs?
Officially, US President Donald Trump is introducing tariffs on Canada to combat the "extraordinary threat" to US national security posed by uncontrolled drug trafficking.
However, according to Canadian Prime Minister Justin Trudeau, Trump’s tariffs are aimed at weakening Canada’s economy—or even pushing it towards collapse—so that the US could more easily annex Canadian territory.
Technical Analysis of USD/CAD
In our previous USD/CAD analysis, we highlighted key levels:
→ Resistance at 1.44600
→ Support at 1.43600
New chart data shows that bulls attempted to break through the 1.44600 resistance level, but the price failed to hold above the psychological barrier of 1.45000. Support at 1.43600 remains relevant for now.
Bulls may attempt another push upwards if the price retraces to the lower blue trendline. However, whether this scenario plays out will largely depend on the broader fundamentals related to Trump’s tariffs on Canada, Mexico, and China.
Trade on TradingView with FXOpen. Consider opening an account and access over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Consider accessing over 700 markets with tight spreads from 0.0 pips and low commissions from $1.50 per lot.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.