US Dollar vs Canadian Dollar ticks up after new tariffs spark market uncertainty

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Us dollar vs canadian dollar rises 0.50%

Highlights

The United States imposed 50% tariffs on various Canadian goods after failed trade talks, with Canada enacting retaliatory tariffs effective September 8, 2026.
Adjustments in US Treasury policy, including increased long-dated bond buybacks, have added to broader market uncertainty for USD/CAD.
USD/CAD trades under key short- and medium-term averages with indicators skewing bearish; forecast range is C$1.3766 to C$1.3943 and an 80% chance of a downward move.

Escalating tariffs reshape sentiment as policy shifts unsettle markets

A significant escalation in trade tensions between the United States and Canada is impacting the US Dollar vs Canadian Dollar. The US imposed 50% tariffs on a range of Canadian goods following failed trade talks, and Canada responded with retaliatory tariffs taking effect on September 8, 2026. Changes in US Treasury policy, including increased long-dated bond buybacks, are also contributing to broader market uncertainty.

Anton Kharitonov, expert at Traders Union, sees USD/CAD under heavy short- and medium-term pressure, despite today's uptick. He points to key technical signals — with the pair stuck below the 20-day and 50-day moving averages, and downside momentum confirmed by MACD, ADX, and a negative BBP. Kharitonov notes persistent market jitters from escalated US-Canada trade tensions, driving a risk-off sentiment that may weigh on the pair longer. He remains skeptical of any quick recovery, given the conflicting and generally bearish momentum indicators. "Until USD/CAD breaks convincingly above C$1.391 or a shift in momentum occurs, I expect sellers to stay firmly in control."

Viktoras Karapetjanc, expert at Traders Union, believes the latest trade policy actions present new opportunities for traders who thrive in volatility. He highlights the underlying bullish structure with MA-50 still above MA-200 and sees ongoing US Treasury policy shifts as supportive for future upside moves. Karapetjanc notes that, despite current consolidation, the long-term support at the 200-day average remains strong. He is confident that the market offers multiple setups for tactical entries around key levels. "With bullish structure intact, I expect further growth in USD/CAD if resistance at C$1.391 is breached."

Sholanke Dele, market strategist, focuses on the negative sentiment caused by sharp US-Canada trade escalation. She sees high uncertainty discouraging strong directional bets in the short term. Dele warns that conflicting momentum signals and oversold readings increase downside risk. "Market confidence remains fragile — keep risk tight until trade tensions subside and signals align."

Downward momentum persists beneath resistance as technical signals diverge

USD/CAD is trading below its 20-day and 50-day moving averages (C$1.3923 and C$1.4046), indicating ongoing short- and medium-term downward pressure. The pair sits just above the 200-day moving average (C$1.3833), offering a measure of longer-term support, and the MA-50 vs MA-200 alignment remains bullish. The near-term ceiling is at C$1.391, while support is seen at C$1.3851, with the Ichimoku Kijun line (C$1.3931) acting as resistance. Momentum is skewed to the downside, as reflected in MACD and ADX sell signals, a negative Bull/Bear Power (BBP) reading, and the Awesome Oscillator. The RSI and CCI both point to oversold conditions, while the Stochastic RSI gives a strong buy reading, highlighting divergence in momentum signals. Price action today is near the top of the session's range, with volatility at 0.43%, and intraday trading has leaned into strength toward resistance, but momentum indicators show conflicting signals.

Earlier, analysts noted that persistent downside momentum and technical barriers continued to pressure USD/CAD. The latest escalation in trade tensions and conflicting momentum signals add further complexity to the outlook, making the C$1.3851 support level especially critical for traders monitoring potential downside risk.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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