USD/CAD: Will the CAD Recover After Trump's Tariff Plans?

21 Jan

A bombshell announcement from US President Donald Trump sparked chaos in the foreign exchange markets, as he hinted at imposing 25% tariffs on imports from Canada and Mexico as early as February. The news sent the Canadian Dollar plummeting to multi-year lows against its US peer, while the US Dollar staged a modest recovery from its overnight slump.

The Canadian Dollar (CAD) found itself under intense selling pressure as investors scrambled to reassess the country's economic prospects in light of Trump's protectionist policies. The currency's decline raised fresh concerns about the country's trade relationships and the potential impact on economic growth.

Meanwhile, the US Dollar (USD) rallied, shrugging off its overnight dip to a two-week low. Market analysts expect Trump's policies to fuel inflation and force the Federal Reserve (Fed) to maintain its hawkish stance, which could boost the value of the US currency.

From a technical perspective, the CAD's price chart is currently trading near a critical supply area around 1.4425. Our analysis suggests that the price has reached a turning point after rejecting the key resistance level of 1.4500. We are looking for a bearish reversal, which could set the stage for further declines in the Canadian Dollar.

The implications of Trump's tariff threat are far-reaching and have significant implications for Canada's economy. As the situation continues to unfold, investors will be watching the markets closely for any signs of a bearish reversal in the Canadian Dollar.

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24 Jan

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Moving SL to Breakeven