The USDCAD is under pressure, weighed down by a combination of softer U.S. economic data and a court ruling that favors the Canadian dollar. Earlier today, weaker-than-expected U.S. initial and continuing jobless claims raised concerns about the labor market, prompting a drop in U.S. yields. The move lower in yields has reduced demand for the U.S. dollar across the board.
Adding to USD weakness is a U.S. federal court decision blocking the Trump administration’s “Liberation Day” tariffs. The ruling, which invalidated tariffs imposed under the International Emergency Economic Powers Act (IEEPA), directly impacts tariffs on major U.S. trade partners like Canada. This is CAD-positive, as it reduces trade uncertainty and supports the Canadian economy – at least for now. The administration is saying the ruling did nothing and there are ways around the ruling as well. .
Technically, the USDCAD failed to hold above its 50% midpoint of the May range at 1.38499, and the 200-hour moving average near 1.3835, stalling at that key level on a correction in the European morning session too. The rebound seen earlier this week has faded, with price now trading below both the 200-hour MA, the 50% retracement and more recently the broken 38.2% at 1.38107 of the May decline as well .
Focus now shifts to the downside, with immediate targets at the 100-hour moving average near 1.37772. Below that, traders will be watching the swing area between 1.37498 and 1.37724—a zone that has seen multiple inflection points and could attract buyers on first test.
Key Levels:
-
Resistance: 1.38107 (38.2% of the May range), 1.3835 (200-hour MA), 1.38499 (50% midpoint), 1.38607 (high today), 1.3889 ((61.8%)
-
Support: 1.37772 (100-hour MA), 1.37498–1.37724 (swing area),
Summary:
The confluence of weakening U.S. economic data and legal setbacks for Trump’s tariff strategy has tilted momentum in favor of the Canadian dollar
