Trump cancels trade talks with Canada, USDCAD shoots up

After enjoying a wave of positive sentiment around global trade, President Trump appears to be shifting the narrative once again. In a public statement, he mentioned being "in the process of making trade deals"—only to later shake markets with two major moves.

First, he announced the re-imposition of sanctions on Iran, citing a lack of gratitude from the Ayatollah, saying, “he didn’t say thank you.” Then, in a Truth Social post, he declared the cancellation of ongoing trade talks with Canada.

The reaction in currency markets was immediate: USDCAD spiked nearly 900 pips in under three hours, surging back above the 1.37 level as traders priced in renewed trade tensions.

Read More: Gold retraces, facing headwinds as positive mood dampen its demand

The announcement led to a massive correction in the CAD which gave up some of its decent performance over the week, particularly as the Iran-Israel conflict resolution created newfound positive sentiment around markets.

The past few 30m Candles brought the pair to new highs since the middle of the week and prices have since corrected slightly.

Markets are now awaiting for further comments from the US President and the Canadian Prime Minister Mark Carney has still to respond.

USDCAD remains in a downtrend, however this morning's price action led to the building of a higher low, with prices now contained in a triangle formation – Watch for any breakouts both ways

Closing above 1.37 will point towards the weekly highs at the 1.38 Psychological level.

A further reversal upwards will see 1.3860 as the next Main resistance.

A rejection of the news would point towards a retest of the current Support, however there is still some road to cover for Bears to arrive there. Watch for a break below 1.3630 for higher probabilities of this scenario.


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