The USDCAD began the new trading day near its session low at 1.3985, just above the 38.2% retracement of the decline from the March 2025 high to the January 2026 low at 1.39839. Importantly for buyers, that low remained comfortably above the rising 100-hour moving average at 1.39726 and well above a key swing area between 1.3948 and 1.3966, which has transitioned from resistance into support.
Together, these levels form an important support zone. A move below that cluster would increase the bearish bias and hand more control back to sellers. Until then, the broader uptrend remains intact and buyers continue to hold the advantage.
On the topside, resistance remains at last week’s high of 1.40332. A break above that level would strengthen the bullish case and open the door toward the October 15, 2025 high near 1.4082, followed by the November 2025 high and the 50% retracement level at 1.41384. That 50% midpoint is likely to represent a significant hurdle on any initial test.
From a fundamental perspective, as the Iran-U.S.-Israel conflict appears to be moving toward a peace agreement, investor attention may soon shift back to trade policy. That could put the spotlight squarely on U.S.-Canada relations and the upcoming review of the United States-Mexico-Canada Agreement (USMCA). Markets remain concerned that trade tensions could reemerge if negotiations become contentious.
Currently, several tariffs remain in place on Canadian exports, including duties on steel, aluminum, automobiles, lumber, and certain wood products. Canada has maintained retaliatory tariffs on U.S. vehicles as well as roughly C$15.6 billion worth of U.S. steel and aluminum imports. Looking ahead, the formal USMCA review scheduled for July 2026 is widely viewed as the next major potential flashpoint in the relationship
