Black Swan! USDCAD Faces Looming Crises and Extreme Volatility

Tank

Summary:

Trump signed an executive order imposing new 50% tariffs on a range of Canadian exports, to take effect in 30 days.

BUY USDCAD

EXP

TRADING

1.40750

Entry Price

1.45000

1.38000

1.41063 +0.00371 +0.26%

0.0

Pips

Flat

1.38000

Exit Price

1.40750

Entry Price

1.45000

Fundamentals

Canada’s overall inflation rate slowed to 2.8% in June, driven primarily by a decline in gasoline prices, which eased the cost of fuel for consumers. Driven by the interim ceasefire agreement between the U.S. and Iran and the decline in international oil prices, gasoline prices fell 10.2% month-over-month, marking the largest monthly drop since April 2025. Although prices were still up 20.5% year-over-year, the rate of increase narrowed significantly from May’s 33.2%.

As the July monetary policy meeting approaches, several Federal Reserve officials have been sending hawkish signals, suggesting that further interest rate hikes may be necessary if inflationary pressures persist. However, the market still widely expects the policy rate to remain unchanged at the July meeting; interest rate futures indicate a probability of about 15% for a rate hike in July, rising to about 65% in September. Cleveland Fed President Hamack stated that U.S. inflation remains too high and the labor market is nearing full employment. She noted that this is the first time since joining the Fed that she has heard businesses proactively call for interest rate hikes to curb inflation, and she projected that the year-over-year core Personal Consumption Expenditures (PCE) price index for June would rise to 3.3%.

Technical Analysis

Looking at the USD/CAD on the 4-hour chart, the Bollinger Bands are narrowing and the moving averages are flattening out, suggesting a potential rebound to around 1.41. The RSI stands at 55, indicating the market has entered a wait-and-see zone. On the daily chart, the Bollinger Bands are narrowing, moving averages are flattening, and following a MACD death cross, the fast and slow lines have pulled back to near the 0-line, suggesting a potential trend reversal at any moment. The RSI stands at 47, reflecting a predominantly bearish market sentiment. Strategically, look to buy on dips.

Black Swan! USDCAD Faces Looming Crises and Extreme Volatility_1

Trading Recommendation

Trading Direction: Buy

Entry Price: 1.407

Target Price: 1.45

Stop-Loss Price: 1.38

Support Levels: 1.39, 1.38, 1.37

Resistance Levels: 1.42, 1.45, 1.48

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Black Swan! USDCAD Faces Looming Crises and Extreme Volatility

Risk Disclosure