USD/CAD is higher on the week after buyers repeatedly defended its 100- and 200-hour moving averages, trading near 1.4087. A new U.S. tariff framework has underpinned the dollar, keeping the pair’s near-term bias tilted toward buyers.
Buyers hold the technical advantage in USD/CAD as long as the pair stays above its 200-hour moving average, now near 1.4061. The pair is up on the week despite a choppy stretch of sessions, and it currently trades near 1.4087 after rotating lower from a fresh weekly high.
The turn began Monday, when USD/CAD found a bottom at 1.4003, just above Friday’s low and the psychological 1.4000 level. Buyers pushed the pair back above the falling 100-hour moving average, and the rally extended into Tuesday, breaking above the 200-hour moving average and carrying toward the July 10 swing low at 1.4116 before the advance lost steam.
Buyers defend the hourly moving averages
From there the pair turned into a roller coaster. A corrective pullback dragged price back toward the 100- and 200-hour averages, but buyers stepped in and defended those levels Thursday. Today the pair briefly slipped below the 100-hour average before rising support from the 200-hour average sparked another bounce, lifting price to a new weekly high at 1.4114 — just two pips shy of the 1.4116 target — before sellers resurfaced.
The map from here is straightforward. A decisive move back below those averages would likely turn recent buyers into sellers and shift focus toward the 1.4000/03 lows from Friday and Monday. Further downside would potentially expose the 38.2% Fibonacci retracement of the rally from the May low to the June high, at 1.3981.
On the topside, the 1.4116 to 1.4148 resistance zone — the former support floor that held from mid-June through mid-July — remains the key hurdle. A sustained break above it would mark another technical win for buyers.
Tariffs underpin the dollar
Trade policy drove the fundamental backdrop. The Trump administration implemented a new tariff framework imposing 10% or 12.5% duties on imports from dozens of countries, with Canada receiving the lower 10% rate while existing tariffs on steel, aluminum, and copper stayed in place. The framework supported the U.S. dollar on expectations that higher import costs could keep inflation elevated and delay Fed rate cuts.
Canada spent the week emphasizing negotiations over retaliation while pressing to diversify trade beyond the U.S. For now, the battle around the hourly moving averages remains the barometer for USD/CAD’s near-term direction.
Source: investingLive
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