USD/CAD Hovers Near 1.3800 Amid Trump’s Tariff Shift

The USD/CAD currency pair is trading steadily around the 1.3800 level during Wednesday’s North American session, posting modest gains after touching a six-month low earlier this week. The pair remains locked in a narrow range, with the Canadian Dollar (CAD) showing little volatility. Traders are sifting through recent economic data and geopolitical signals, including new PMI figures and cautious optimism about easing trade tensions, which are shaping market dynamics.

Late Tuesday, comments from the U.S. President sparked a fleeting US Dollar rally, as he ruled out dismissing the Federal Reserve Chair and suggested a possible rollback of tariffs on China. This fueled a brief surge in Asian markets, but the momentum waned as investors grappled with persistent concerns over the Fed’s credibility and US-China trade uncertainties. Compounding the picture, a preliminary Composite PMI reading revealed a slowdown in U.S. business activity, slipping to 51.2 from 53.5 in March. The Services PMI dropped sharply to 51.4, while manufacturing output nudged higher to 50.7, highlighting a mixed economic outlook.

In Canada, the CAD holds firm, supported by steady equity markets and hopes that tariff-related turbulence may subside. However, traders are eagerly awaiting Friday’s Canadian Retail Sales report, which could offer fresh clues about the economy’s strength and guide the CAD’s trajectory. For now, the currency remains in a holding pattern, with market participants seeking stronger catalysts for direction.

Technical Outlook: Bearish Trend Intact

Technically, USD/CAD retains a bearish bias despite Wednesday’s slight uptick. The pair is oscillating within a daily range of 1.3798 to 1.3861. Momentum indicators paint a mixed picture: a 10-period momentum reading of −0.02398 leans toward a buy signal, but the Moving Average Convergence Divergence (MACD) continues to flash a sell, and the Bull Bear Power indicator stays neutral. The Relative Strength Index (RSI) at 33.94 is close to oversold territory, suggesting potential short-term relief from selling pressure.

Moving averages reinforce the downward trend, with the 20-day Simple Moving Average (SMA) at 1.4060, the 100-day SMA at 1.4274, and the 200-day SMA at 1.4008 all pointing lower. The 10-day Exponential Moving Average (EMA) at 1.3903 and the 10-day SMA at 1.3872 add further bearish weight. Resistance levels are pegged at 1.3872, 1.3903, and 1.4008, with immediate support at 1.3813. Absent a major catalyst—“USD/CAD Hovers Near 1.3800 Amid Trump’s Tariff Shift and Six-Month Low” suggests the pair will likely remain under bearish pressure, with traders watching upcoming economic data for breakout signals.