Tariff disputes coupled with oil price volatility caused the USD/CAD to fluctuate and decline.
2026-02-23 13:35:05
The USD/CAD pair edged lower to around 1.3665 during Monday's Asian trading session. The US dollar was pressured by tariff uncertainty, while oil price volatility was a significant factor influencing the Canadian dollar.
The U.S. Supreme Court ruled that President Trump's broad tariffs imposed under the International Emergency Economic Powers Act exceeded his authority. Trump subsequently announced a uniform 15% tariff framework for imports.
Repeated policy changes have eroded market confidence in the US dollar, putting pressure on the dollar index. Economists point out that most Canadian exports were previously excluded from IEEPA tariff coverage.
The product-specific tariffs, which have a greater impact on the Canadian economy, were not affected by the court ruling, thus limiting the impact on the fundamentals of the Canadian economy.
Meanwhile, escalating geopolitical risks could provide support for oil prices. Reports indicate that Trump is considering limited airstrikes against Iran and has stated that he will consider larger-scale action if diplomatic efforts fail.
A new round of talks between the US and Iran will be held in Geneva. As Canada is a major crude oil exporter, rising oil prices typically benefit the Canadian dollar; conversely, weaker oil prices could weaken the CAD's performance.
From a daily chart perspective, USD/CAD has encountered significant resistance above 1.3700 after multiple attempts, indicating strong technical pressure in that area. The price failed to break through the previous high, forming a potential double top pattern, suggesting weakening upward momentum in the short term.
The moving average system is beginning to flatten, and the short-term moving averages are turning downwards, suggesting that the short-term trend is shifting from strong to weak. The MACD indicator shows a bearish crossover at a high level, with the green bars gradually expanding, indicating increasing bearish momentum.
The RSI has fallen back to around 50. If it breaks below the midline, it will further confirm the correction pattern. The key support level is in the 1.3620 area, which is both the lower edge of the previous consolidation platform and a short-term dividing line between bullish and bearish sentiment.
If the daily closing price effectively breaks below 1.3620, it may further decline to the 1.3550 or even 1.3480 area. Resistance levels to watch remain at 1.3720 and 1.3800. Only a sustained move above 1.3720 can restore a bullish bias.
Editor's Note:
The current USD/CAD exchange rate movement is driven more by uncertainty surrounding the US dollar than by a significant improvement in Canadian fundamentals. If oil prices continue to rise due to geopolitical risks, the Canadian dollar may receive additional support, putting further downward pressure on the exchange rate.
However, if risk sentiment eases or US data strengthens again, the dollar could quickly recover its losses. As long as the key support level of 1.3620 holds, the market is likely to remain range-bound; once breached, the downside potential will be significantly unlocked.
The U.S. Supreme Court ruled that President Trump's broad tariffs imposed under the International Emergency Economic Powers Act exceeded his authority. Trump subsequently announced a uniform 15% tariff framework for imports.
Repeated policy changes have eroded market confidence in the US dollar, putting pressure on the dollar index. Economists point out that most Canadian exports were previously excluded from IEEPA tariff coverage.
The product-specific tariffs, which have a greater impact on the Canadian economy, were not affected by the court ruling, thus limiting the impact on the fundamentals of the Canadian economy.
Meanwhile, escalating geopolitical risks could provide support for oil prices. Reports indicate that Trump is considering limited airstrikes against Iran and has stated that he will consider larger-scale action if diplomatic efforts fail.
A new round of talks between the US and Iran will be held in Geneva. As Canada is a major crude oil exporter, rising oil prices typically benefit the Canadian dollar; conversely, weaker oil prices could weaken the CAD's performance.
From a daily chart perspective, USD/CAD has encountered significant resistance above 1.3700 after multiple attempts, indicating strong technical pressure in that area. The price failed to break through the previous high, forming a potential double top pattern, suggesting weakening upward momentum in the short term.
The moving average system is beginning to flatten, and the short-term moving averages are turning downwards, suggesting that the short-term trend is shifting from strong to weak. The MACD indicator shows a bearish crossover at a high level, with the green bars gradually expanding, indicating increasing bearish momentum.
The RSI has fallen back to around 50. If it breaks below the midline, it will further confirm the correction pattern. The key support level is in the 1.3620 area, which is both the lower edge of the previous consolidation platform and a short-term dividing line between bullish and bearish sentiment.
If the daily closing price effectively breaks below 1.3620, it may further decline to the 1.3550 or even 1.3480 area. Resistance levels to watch remain at 1.3720 and 1.3800. Only a sustained move above 1.3720 can restore a bullish bias.
Editor's Note:
The current USD/CAD exchange rate movement is driven more by uncertainty surrounding the US dollar than by a significant improvement in Canadian fundamentals. If oil prices continue to rise due to geopolitical risks, the Canadian dollar may receive additional support, putting further downward pressure on the exchange rate.
However, if risk sentiment eases or US data strengthens again, the dollar could quickly recover its losses. As long as the key support level of 1.3620 holds, the market is likely to remain range-bound; once breached, the downside potential will be significantly unlocked.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
