USD/CAD found support on Monday just above Friday’s low and the key psychological level at 1.4000. The pair reached a low of 1.4003, where buyers emerged and pushed the price back above the declining 100-hour moving average. The rebound continued into Tuesday, first pausing ahead of the 200-hour moving average before buyers later gained enough traction to break above it. That advance carried USD/CAD toward the July 10 swing low at 1.4116, where momentum started to fade.

The price action then turned more volatile. A corrective pullback took the pair back toward the 100-hour and 200-hour moving averages, but buyers defended those levels on Thursday. On Friday, USD/CAD briefly moved below the 100-hour moving average, but rising support from the 200-hour moving average helped trigger another bounce. The rebound lifted the pair to a new high for the week at 1.4114, just two pips below the 1.4116 target, before sellers returned. The pair has since moved lower and is trading near 1.4087.

The near-term technical picture has been relatively clear since Tuesday: despite choppy trading, buyers have repeatedly defended the 100-hour and 200-hour moving averages. The more significant of the two is the 200-hour moving average, currently near 1.4061. While the pair remains above that level, buyers maintain the technical edge from both short-term and medium-term perspectives.

A decisive move back below those moving averages would weaken that setup. If such a move occurs, recent buyers could turn into sellers, shifting attention back toward the 1.4000/03 lows from Friday and Monday. The next area of focus could then become the 38.2% retracement of the rally from the May low to the June high, located at 1.3981.

On the upside, the main resistance area remains the 1.4116 to 1.4148 zone. That range was the former support floor that held from mid-June through mid-July. A sustained break above it would mark another technical win for buyers and could allow for further upside momentum. Until then, price behavior around the hourly moving averages remains the main gauge for the pair’s near-term direction.

On the fundamental side, U.S. trade policy dominated market headlines this week after the Trump administration introduced a new tariff framework. The framework imposes 10% or 12.5% duties on imports from dozens of countries. Canada was assigned the lower 10% rate, although existing tariffs on products including steel, aluminum, and copper remain in place. Market participants are watching how the new policy may affect inflation, negotiations with trading partners, and the Federal Reserve’s policy outlook.

Canada spent the week responding to the latest U.S. tariff adjustments while continuing to emphasize negotiations rather than retaliation. The opening of the Gordie Howe International Bridge underscored the importance of North American trade, but the event was overshadowed by renewed tariff tensions. Canadian officials also continued to highlight the goal of diversifying trade beyond the United States while preserving integrated supply chains.

For USD/CAD, the tariff discussion matters because the exchange rate is exposed to both U.S. dollar moves and Canada’s trade relationship with its largest trading partner. Any policy shift that affects import costs, cross-border supply chains, or central-bank expectations can quickly become relevant for the pair, especially when price is already testing closely watched technical levels.

The new tariff framework supported the U.S. dollar on expectations that higher import costs could keep inflation elevated and delay Federal Reserve rate cuts.

Trade policy, rather than trade agreements, was the central theme of the week. Although Canada avoided the higher tariff tier, continuing sector-specific duties and the new U.S. tariff framework leave uncertainty elevated for businesses, policymakers, and financial markets on both sides of the border. Traders will continue to watch whether USD/CAD can hold the 200-hour moving average near 1.4061 or whether renewed selling pressure brings the 1.4000/03 area back into focus.