USDCAD moves higher after Trump confirms tariffs to start in March.

USDCAD surged higher yesterday, re-entering the “Red Box”, a key consolidation range that contained price action from December through early February (see chart above). Within this range, the pair initially spiked higher following Trump’s announcement of 25% tariffs on Canadian imports in early February. However, after the tariffs were postponed the same day, the price retraced back into the Red Box, eventually finding support at its lower boundary.

On February 13, USDCAD broke below the Red Box, triggering a momentum-driven decline that bottomed out at 1.4150. Last week, the pair consolidated those losses, trading in a choppy manner. However, this week has seen renewed upside momentum, pushing the price back into the Red Box and signaling a shift in market sentiment.

The rally also saw USDCAD reclaim the falling 100-bar moving average on the 4-hour chart (1.4263). In today’s session, price action fluctuated around the 200-bar moving average (1.4334) before breaking higher on news that Trump will proceed with the March tariffs on Canadian imports.

Key Technical Levels to Watch

• Support Levels:

  • 1.4395 – 38.2% retracement of February’s trading range
  • 1.4366 – Yesterday’s high

• Resistance Levels:

  • 1.4448 – 1.4471 – Swing area & upper boundary of the Red Box
  • 1.4459 – 50% retracement of February’s trading range (adds confluence)
  • 1.4471 – A confirmed break above this level would reinforce bullish momentum

With buyers regaining control, the focus is on whether 1.4395 – 1.4366 holds as support. A sustained push higher could challenge the 1.4448 – 1.4471 resistance zone. A break above 1.4471 would confirm further upside potential, opening the door for an extended move higher.

This article was written by Greg Michalowski at www.forexlive.com.