Buying pressure lifts dollar vs Canadian dollar higher in today trading

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Us dollar/canadian dollar rises 0.50% today

Highlights

US tariffs of 25% on Canadian and Mexican goods sparked strong US dollar demand and a sharp Canadian dollar drop.
Fears of inflation from tariffs reduced expectations for near-term Fed rate cuts, increasing volatility for the Canadian dollar.
USD/CAD likely trades between C$1.3628 and C$1.3743 this week, as mixed momentum indicators cap the probability of a sustained breakout.

Tariff-driven dollar inflows as policy shift spurs Canadian dollar weakness

On March 4, 2026, the United States imposed 25% tariffs on goods imported from Canada and Mexico, prompting strong demand for the US dollar and driving a selloff in the Canadian dollar. The announcement added to concerns over potential inflationary pressures in the US, reducing expectations for near-term Federal Reserve rate cuts. Increased volatility and long-term economic risks are also in focus for the Canadian dollar following this move.

Anton Kharitonov, expert at Traders Union, sees the recent USD/CAD rally as fragile within an overall bearish context. He highlights that intraday buying was triggered by geopolitical news, but longer-term technicals remain negative. The upside is capped by the MA-200, and momentum signals are conflicting. Weakness in CAD is driven by risk events, not sustained confidence. As he cautions, "This short-lived bounce looks unstable — I see a strong risk of reversal if selling resumes after the news impact fades."

Viktoras Karapetjanc, expert at Traders Union, believes the tariff decision opens further opportunities for USD/CAD upside. He sees bullish structure forming on the back of strong demand for US dollars, as investors seek protection from trade-driven volatility. Current levels above short-term averages confirm his constructive stance. "The market offers multiple setups for buyers — once above C$1.3743, further growth toward C$1.3800 appears likely in my view."

Jainam Mehta, market strategist, notes that technical and macro factors are in flux after the US tariffs. He observes mixed signals on momentum and oversold readings on oscillators, which could lead to tactical reversals. Mehta suggests traders monitor both price action and macro headlines for breakout setups. "A potential contrarian entry exists if USD/CAD fails to hold above C$1.3700 — I would watch for swift moves on either side of the current range."

Intraday buying strength as mixed indicators fuel momentum divergence

Momentum indicators are mixed: the daily MACD and ADX both signal a bearish bias but at low conviction, while RSI (45.4) and Stoch RSI indicate oversold conditions, suggesting potential for a bounce. Bull/Bear Power signals buyers are gaining traction intraday, and the Awesome Oscillator is neutral, neither confirming nor contradicting the trend. Today’s 0.50% gain reflects a firm upward move after a slight bullish gap at the open, with the current price near today’s range high, pointing to moderate intraday volatility and strength toward the highs. However, conflicting momentum and oscillator signals underscore divergence in short-term direction, as intraday buying activity stands in contrast to the prevailing daily bearish momentum.

Last time, analysts noted that USD/CAD remains above its 20-day and 50-day moving averages but below the 200-day, signaling short-term and medium-term bullish momentum while longer-term bearish pressure persists. Momentum indicators are mixed, with MACD and ADX lacking strong trend confirmation, RSI showing mild bullish bias, and intraday strength evident as the pair approaches key resistance levels amid heightened volatility.

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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