The USDCAD once again broke out of the Red Box today amid tariff tensions between the U.S. and Canada. Initially, Canada announced an electricity surcharge, prompting a sharp market reaction. However, after discussions, Canada rescinded the surcharge, and President Trump countered by suggesting he may adjust the 50% tariff threat on steel and aluminum. Additionally, both sides agreed to meet on Thursday to discuss necessary adjustments to the USMCA agreement or its implementation.

As a result, tariff-driven headlines have triggered volatile price action, with swings in both directions depending on the prevailing sentiment.

Technical Outlook

• Current Price: Trading around 1.4400, between key moving averages.
• Resistance:
  • 1.4404 (200-hour MA) – A move above this level would keep the price in the upper portion of the Red Box.
• Support:
  • 1.4368 (100-hour MA) – A break below this level could shift focus toward:
  • 1.4345 (50% retracement level) – A key technical support.
  • 1.4268-1.4278 (Lower end of the Red Box, key swing area) – Deeper downside target.

Summary

• USDCAD remains range-bound between its 100-hour and 200-hour MAs.
• A break above 1.4404 would favor a move higher within the Red Box.
• A break below 1.4368 increases the chance of a test toward 1.4345 and possibly 1.4268-1.4278.
• Tariff news remains a major driver of volatility, with further developments likely influencing direction.