USD/CAD Reversal Signal Emerges Amid US-Canada Trade Tensions

The USD/CAD pair has been experiencing a relentless bearish trend since early July but is showing signs of losing momentum. A bullish reversal signal has emerged around a major support zone, which could indicate that the downtrend may be coming to an end.

US-Canada trade tensions are back in focus as the two sides are still trying to reach an agreement before the 19 August tariff deadline. The US announced 50% tariffs on roughly $20 billion of Canadian goods but delayed their introduction for 30 days, providing a window for negotiations.

The recent July CPI report from Canada came in slightly hotter than expected with headline CPI rising 3.0% y/y from 2.8% in June, driven largely by gasoline prices.