USDCAD dropped to 1.3760, its lowest level since August 21, after buyers failed to defend the pair's 200-day moving average. The breakdown came even though a stronger U.S. jobs report and a weaker Canadian employment reading had initially favored the dollar. Separately, U.S.-Canada trade tensions escalated after President Trump threatened Bombardier over its U.S. sales.
Sellers pressed USDCAD to 1.3760, its lowest level since August 21, pushing the pair through a support floor that had held since last week. The break came despite fundamentals that should have favored the greenback.
The pair had rallied at the end of last week after a stronger-than-expected U.S. jobs report and weaker-than-expected Canadian employment data. But that rally stalled in a swing area between 1.38669 and 1.3877, and buyers never reclaimed the zone.
USDCAD breaks below key support
The failed rally sent USDCAD back toward its 200-day moving average at 1.38343. The pair traded above and below that level before breaking lower, tipping the longer-term bias toward sellers. The decline then extended into a swing area between 1.3765 and 1.3778, where a bounce stalled ahead of the falling 100-hour moving average near 1.38138. That floor then gave way, sending the pair to 1.3760 before it bounced modestly.
Staying below the 1.3765-1.3778 zone keeps sellers favored, with the next target near 1.3732, the August swing low and a rising trend line. A break below that level would open the door toward 1.3710. Buyers, meanwhile, would first need to reclaim 1.3778, then the 61.8% retracement near 1.3793.
Trade tensions escalate separately
Separately, U.S.-Canada trade tensions intensified this week. President Trump threatened to ban Bombardier from selling in the U.S. unless the aircraft maker makes new commitments to build domestically. According to MarketWatch: "NO MORE SELLING BOMBARDIER IN THE UNITED STATES!" Trump wrote in the post.
The threat landed hours before new Canadian tariffs on $20 billion worth of American goods took effect, a response to the 50% tariffs Trump had imposed on Canadian imports last month. Bombardier's Toronto-listed shares dived 6%, while its U.S.-listed stock also fell 6%.
Sources: Investinglive, MarketWatch
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