Upside Breakout Opens the Door for a New Bullish Push

Central Bank

Economic

Summary:

During the previous push, the RSI touched 71, moving into clear overbought conditions, but this minor pullback allowed the reading to reset significantly, showing that bullish strength recovers quickly.

BUY USDCAD

EXP

PENDING

1.38220

Entry Price

1.39080

1.37700

1.38566 +0.00128 +0.09%

Pips

PENDING

1.37700

Exit Price

1.38220

Entry Price

1.39080

Trade tensions between the United States and Canada escalated over the weekend after Washington imposed 50% tariffs on select Canadian products following the breakdown of trade talks on Friday. In response, Canadian Prime Minister Mark Carney announced that Canada will implement retaliatory tariff measures starting September 8.

U.S. Trade Representative Jamieson Greer stated that Canada declined to finalize the agreement under the terms previously established. For his part, Carney noted that while progress was made during discussions, it fell short of meeting Canada's objectives, criticizing last-minute changes introduced by Washington as unfair, economically damaging, and capable of undermining the credibility of any future agreement.

On the geopolitical front, U.S. Treasury Secretary Scott Bessent announced a new round of economic measures described as "unprecedented" against Iran. The sanctions target sectors considered strategic to the country's financing, including digital assets, technology, gold, aviation, and maritime shipping. According to the Treasury Department, nearly 60 entities connected to Iran were sanctioned, including intermediary firms and vessels associated with the shadow fleet operating across the UAE, Hong Kong, China, Singapore, Switzerland, and several European nations.

The initiative, dubbed "Outcast", aims to restrict all potential revenue streams that Washington claims fund the Islamic Revolutionary Guard Corps (IRGC). Bessent added that President Donald Trump is actively engaging with international leaders to foster greater economic isolation of Iran.

Following the announcement, U.S. Treasury yields experienced a mild pullback, with the 10-year note yield falling 3.5 basis points to 4.70%. This move partially reduced the opportunity cost of holding non-yielding assets, offering a more supportive backdrop for gold.

Meanwhile, minutes from the Federal Reserve's most recent meeting showed that several committee members remain concerned over persistent inflation pressures. The document revealed that alongside officials such as Beth Hammack, Neel Kashkari, and Lorie Logan, other monetary policymakers would also be open to supporting additional interest rate hikes if inflation fails to show a sustained moderation in coming months. Upside Breakout Opens the Door for a New Bullish Push_1

Upside Breakout Opens the Door for a New Bullish Push_1

Technical Analysis

USDCAD is moving within an upward trend that is currently approaching its descending trendline, aligned closely with the 200-period moving average at 1.3854, while the 100-period average sits at 1.3854 as well. If price breaks above the 200-period average and trendline, we could see an additional push toward the local resistance target at 1.3608, whereas optimal entries could emerge on a pullback to the local support line at 1.3821—an area that could attract buyers once again.

Turning to the oscillators, the RSI currently sits at 61; while firmly in bullish territory, it retains room to extend higher as a potential breakout builds. During the previous push, the RSI touched 71, moving into clear overbought conditions, but this minor pullback allowed the reading to reset significantly, showing that bullish strength recovers quickly. Meanwhile, the MACD presents a shallow bearish histogram, but the signal lines remain positioned well inside positive territory, keeping the path of least resistance tilted to the upside following a breakout.

Trading Recommendations

Trading direction: Buy

Entry price: 1.3822

Target price: 1.3908

Stop loss: 1.3770

Validity: Sep 04, 2026 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Upside Breakout Opens the Door for a New Bullish Push

Technical Analysis

Risk Disclosure